As the latest temporary stamp duty cut deadline approaches, thousands of Britons are scrambling to seal the deal on their property purchase before it’s too late. This deadline has serious consequences for first-time buyers, creating a domino effect further up the property chain. The tax-free threshold for first-time buyers is reducing from £425,000 to £300,000 after the deadline. This extreme sense of urgency is leading buyers to rush their contracts.
Property lawyers and conveyancers are working flat out and under extreme pressure to make sure transactions complete before the cut-off date. The problem is that the deadline has not been widely advertised and has “sneaked up on folks,” adding to the urgency. In addition, the nil-rate threshold has been slashed in half from £250,000 to £125,000. Under this amendment, the burden now falls on buyers, who must now pay a 2% tax on properties worth between £125,001 and £250,000.
You can feel the anxiety in the air among practitioners who work on the process.
"If a client cannot complete, it is not necessarily the conveyancer’s fault. These particular clients are in a chain with six or seven others, so it’s about making sure not only your own client can move, but everybody can move,” – Sarah Dwight.
Property lawyers and conveyancers are being put under unprecedented pressure as they try to make sense of this confusing new world. Even with all this effort, they admit, they don’t have – as one put it – “magic wands” to speed up the process. More than 75,000 buyers are expected to now miss the deadline, with many set to face bills of thousands of pounds more.
The overall implications go further than just those making their first purchase. During just the next five years we anticipate an even more additional 130,000 transactions. This increase will be driven by first-time homebuyers and other buyers of owner-occupied housing. The maximum property value eligible for relief will drop from £625,000 to £500,000. This change underscores the dire need to realize the new deadline of 2023.
This urgency to push through deals has filtered down from attorneys to moving companies, too. And movers are shouldering challenges in extraordinary ways to meet their clients’ shifting needs.
“There’s not enough removal companies in the land to move the people that are moving next week.” – David Strank.
Combined with the rush to buy, this has combined to create a frantic mood in the residential real estate market.
“It’s madness in terms of everybody who is trying to move in the last week of March” – Richard Dolan.
The pressure is most acutely felt among those on the margins making faces-to-faces transactions. It further reaches those that have decided to break the glass. A 99-year-old woman is ready to negotiate on her property’s asking price. She’s out to save everybody else’s stamp duty – perhaps the greatest demonstration of how far a person can be driven.
This is the reality that millions of people in England and Northern Ireland contend with every day. Scotland and Wales are immune from these impacts due to their own property tax systems. As the delegation’s deals begin to swirl at their most hyped-up peak, come these bilateral tales of collaboration and conciliation. One prospective first-time buyer promised to push the sale through before 31 March. Out of good faith and constructive collaboration, both qualities found in the fierce, fast, friendly ethos of the creative tech scene, they let the vendor stay until 2 April.