Although there’s discussion in Parliament about extending the stamp duty holiday beyond the end of March or implementing a tapering-off of the tax savings initiative, the existing March 31 deadline is drawing nigh.
Some buyers could save up to £15,000 with the holiday in place so it’s a big incentive to complete before time runs out. On the other hand, the fear of time running out and that purchase suddenly costing thousands more might make some buyers think about pulling out altogether.
This may be a rash move, however, as there’s more to consider than just the stamp duty when it comes to moving house.
You could lose more than just the stamp duty money
Yes, you’ll save some money if you complete before the end of the stamp duty holiday, but if you pull out of your sale because you’re worrying about missing this deadline then you could lose more besides.
There are also the solicitor’s fees, the search fees, surveys and also the time and effort you’ve invested into looking for and finding this new home. If you’re only set to save a couple of thousand in stamp duty, ask yourself if it’s actually worth starting all over again for.
You could lose your dream home
If you’ve found the ideal home and you’re already in the buying tunnel, why stop now? There’s no guarantee that you’ll find a similar property down the line if you withdraw and so you could miss out on the opportunity of a lifetime. Is a few extra thousand on your costs worth this loss?
You might find properties much more expensive in a few months
A knock-on effect of the stap duty holiday is that lots more properties will come onto the market be snapped up before March and so the rest of the year might be a bit of a desert. A dearth of properties means a sellers’ market, which means buyers will have to stump up more cash. You could have to pay more for a similar property to the one you’re about to pull out from or, even worse, have to settle for second or even third option.
Mortgage rates could go up
Interest rates could go up and even a fraction of one per cent will have long-term consequences for your pocket for years to come. In addition to this, you might have to renegotiate your mortgage and if your circumstances have changed or your lender has “refreshed” its products, you might not get as good a deal as you have now.
Think carefully before making any moves
The chance to save up to £15,000 on a house purchase is very attractive and it will be disappointing if you miss this deadline. However, we probably won’t know what the government plans to do with the holiday until on or after the budget announcement on March 3. If the holiday is extended or there’s a tapering off of the benefits, then you could still make substantial savings. Making a sudden decision to pull out could lose you a whole lot more.