Stamp duty extension to benefit 600k buyers to the tune of £2.8bn

The latest market insight by national estate agent, Keller Williams UK, has looked at how many additional homebuyers will now benefit as a result of a double stamp duty extension saving.

Using sold price records from the Land Registry on market transactions to have already completed since the start of 2020, Keller Williams looked at the estimated impact of: -

-          The original stamp duty holiday between 8th July 2020 and 31st March 2021

-          The extension of the holiday from 1st April 2021 and 30th June 2021.

-          The additional extension with a reduced threshold of £250,000 between 1st July 2021 and 30th September 2021.

-          The total benefit of the complete stamp duty holiday period.

The original holiday - £1.9bn saved

Keller Williams research shows that a huge 341,815 transactions are estimated to benefit from the stamp duty holiday by the end of the month.

With the £500,000 threshold in place, an estimated 85% of all transactions will pay no stamp duty at all (289,013) and homebuyers at all price thresholds of the market will save a combined £1,901,636,265.

The extension - £648m saved

With the stamp duty holiday due to end though, it was music to many homebuyers ears when last weeks Budget announcement confirmed that the Government were to keep the SDLT holiday in place with no stamp duty payable on the first £500,000 of any transaction.

This means an estimated 116,449 additional property transactions will benefit from this initial extension, saving a total of £648.1m more in stamp duty and resulting in a further 98,500 homebuyers paying no stamp duty whatsoever.

The soft landing - £206m saved

What’s more, not only do homebuyers have the initial SDLT extension until June 30th 2021, there is an additional extension until 30th September 2021, with a reduced stamp duty free threshold of £250,000.

Keller Williams UK estimates that this soft landing alone will see a further 117,779 transactions benefit, with as many as 56,287 more homebuyers paying no stamp duty and the market saving a total of £206.4m in the process.

The total impact - £2.8bn saved

Across the whole stamp duty holiday period, the benefit is substantial to say the least.

Keller Williams estimates that well over half a million transactions will save due to the holiday (576,093) by the time it ends in September of this year, 77% of which will pay no stamp duty on their purchase, with homebuyers in England saving a massive £2.8bn overall.

CEO of Keller Williams UK, Ben Taylor, commented:

“You need only look at the market data already available to see the huge benefit that the stamp duty holiday has brought, both in terms of the total money saved and the large proportion of the market that has paid no stamp duty on their purchase at all.

Based on current market trends, this impact is set to grow substantially with the double extension of the scheme, and even at a reduced threshold of £250,000, around half of those completing will still have no stamp duty bill to pay when they do.

This extended incentive to transact will ensure buyer demand remains healthy and house price growth remains strong over the spring and summer months.”

Estimated number of transactions and SDLT savings based on 2020 price paid data (PPD category A = standard price paid entry), and averages between the start of the holiday (8th July 2020) to the latest available data (December 2020). The estimated average figures also relate to the number of days in each noted period, with relative SDLT thresholds applied in these cases.