"With 74,000 people only just set to miss the deadline, in part because of the extremely lengthy completion times in England, we think it would make sense to grant a short extension to the deadline"
- Rightmove’s property market expert, Colleen Babcock
An estimated 25,000 first-time buyers are predicted to miss the stamp duty deadline, data from Rightmove shows.
The estimate is measured by homes with two-bedrooms or fewer, a typical home a first-time buyer would purchase, and priced up to £625,000, which is the current maximum stamp duty threshold to be considered a first-time buyer.
In total, an estimated nearly 74,000 home-movers in England are currently going through the legal completion process and will just miss the March 31st deadline. The total number of homes currently going through the legal completion process is much higher, however most were never likely to make the 31st March deadline.
The net effect for this group, who are set to complete just one month later, is a collective £142 million in additional stamp duty tax, compared with what they would have paid if they’d been able to complete in March. For first-time buyers, it is a total of £34 million extra in costs.
The analysis looked at the total number of homes currently going through the legal completion process, and the date they are likely to complete, based on factors including the area and type of property. The data is based on homes marked Sold Subject to Contract (SSTC) and Rightmove data on the average time to complete a home purchase, which is currently 163 days, or just over five months.
At a regional level, buyers in the South East are set to be most impacted, with the highest number of movers from the region set to only just miss out on the stamp duty deadline, and complete later in April. With the South East being the second highest-priced region for homes, this group is likely to face greater costs.
An average home-mover in England will face an extra £2,500 in stamp duty costs from 1st April. However, while first-time buyers of homes priced at £300,000 or less will continue to pay no stamp duty, first-time buyers of homes priced between £500,001 and £625,000 are the most affected group of all, facing an extra £11,250 in costs.
With home-movers understandably eager to avoid unnecessary extra costs, Rightmove has predicted a conveyancing log-jam as 31st March fast approaches, and those going through the completion process try to get their purchase over the line.
Rightmove is now calling for a short extension to the stamp duty deadline by the government, to help the 74,000 home-movers who will only just miss out on the deadline and end up paying more tax.
Rightmove’s property market expert, Colleen Babcock, commented: “We expect a rush to complete close to March 31st as first-time buyers and home-movers try to avoid paying extra in tax. Our numbers show how there is a relatively small, but disproportionately impacted group of first-time buyers who will be caught out by the changing thresholds, highlighting some disparities in the way the current system works. With 74,000 people only just set to miss the deadline, in part because of the extremely lengthy completion times in England, we think it would make sense to grant a short extension to the deadline and help these movers, rather than have them face higher charges when they complete later in April.”
