Homebuyers fall out of love with stamp duty holiday, study reveals

Eighty-five per cent of homebuyers believe that the current market bottleneck caused by stamp duty holiday demand has caused their purchase to be delayed, a new study has found.

Barrows and Forrester suggested that the “shine is starting to come off the stamp duty holiday” for homebuyers who are experiencing long delays and higher house prices as a result of the initiative.

The estate and lettings agent conducted a survey among 1,191 UK homebuyers in May, and found that a further 81% believe their current sale is likely to miss both the initial extended deadline at the end of this month, as well as the secondary deadline due to expire at the end of September.

As well as lengthy delays, current homebuyers are also facing a higher cost as a result of the stamp duty holiday. Since the introduction of the stamp duty holiday, house prices across England alone have climbed by 10.2%, according to the UK House Price Index, meaning the average homebuyer is now paying over £25,000 more as a result.

With many homebuyers facing higher cost of homeownership without the benefit of a stamp duty saving, Barrows and Forrester found that 54% don’t think this stamp duty holiday price surge had been positive for the market. Another 23% were unsure, while just 24% thought it had been good for the market.

Barrows and Forrester managing director, James Forrester, commented: “It looks as though homebuyers have now fallen out of love with Rishi Sunak and his promise of a stamp duty saving, as many now face lengthy market delays, higher house prices and the salt in the wound of having to pay stamp duty on their purchase.

“As with most government housing initiatives, the focus was never really on bringing genuine benefit to homebuyers. The aim has always been to stimulate the housing market in order to claim it as an indicator of economic success against the pandemic backdrop.

“Of course many will have enjoyed a saving, but for many more, an already lethargic and stressful process has been made even worse and these homebuyer woes look set to continue for some time.”

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