Homebuyers undeterred by end of stamp duty holiday

New research has found only 5% of buyers would consider abandoning their plans to buy a property if they missed the June stamp duty deadline in England.

The study by Savills found that just 10% of purchasers may look to renegotiate on price, despite a majority of buyers expecting to miss the 30 June deadline.

The so-called ‘race for space’ that has driven the UK’s prime housing market over the past year is a trend that looks set to continue, with 54% saying that extra living space is now a top priority, rising to 59% in London.

The strong desire for larger homes, with bigger gardens or in greener locations, and closer to family, will continue to underpin demand over the coming months, particularly if the market remains stock constrained, the company says.

Some71% of those currently mid purchase have no expectation of completing ahead of the stamp duty holiday deadline, meaning a potential stamp duty saving was not factored into their decision-making process, according to the latest survey of around 750 Savills buyers and sellers conducted this month.

Frances Clacy, Savills research analyst, said: “Lifestyle choices made during lockdown, or brought forward as a result of the experience of lockdown, have almost totally dominated decision-making in the prime market over the past year and look set to do so over coming months.

“Buyer and seller commitment to moving over the coming year remains strong although slightly lower than in June 2020 when the market reopened after the first lockdown.

“The stamp duty holiday was announced in July [2020], and while it may have brought forward some transactions, this survey tells us that it has not been the major motivator amongst equity rich home movers in the prime market.”

Lifestyle needs continue to dominate buyers’ wishlists, with extra living space and access to green space a priority for many, though there is also evidence of back to work planning, particularly in London.

Frances Clay

“The pandemic has made people re-evaluate what they want from their homes and their leisure time, with many prioritising a better work-life balance,” said Clacy. “In a light-hearted illustration of this, 15% of respondents want their new home to be located close to a pub or restaurant, trumping proximity to work at just 12%.”

She added: “In London, however, it’s a slightly different picture, and there’s evidence of buyers starting to prioritise a return to the office in their choice of home.  Being close to public transport is a key consideration for home buyers again, second now only to proximity to a park.  Over four in ten (43%) in the capital now wish to live close to a station, compared to just 19% across the prime regional markets, and up from 39% in March.

“But even though it’s rare for Londoners not to have a pub or restaurant within close walking distance, proximity to a pub – a top two essential for 11% of respondents – still trumps proximity to work at just 9%.

“More widely, while demand remains strong, realistic pricing from the offset is important to secure a sale and will become even more so once the stamp duty holiday ends particularly if, as we expect, stock constraints begin to ease over coming months as those reluctant to sell while social distancing rules have been in place bring their homes to market.”


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