Stamp Duty  

Sellers drop asking prices ahead of stamp duty deadline

Sellers drop asking prices ahead of stamp duty deadline
 Credit: Simon Dawson/Bloomberg

Sellers have been dropping their asking prices in anticipation of the stamp duty holiday end, according to an estate agency.

Figures from Chestertons showed 10 per cent of its sellers had dropped their asking prices in January, with reductions generally between 2 and 5 per cent.

The estate agency said many sellers were keen to secure a sale before the stamp duty holiday deadline of March 31.

It added that while there were a few buy-to-let investors selling their investments, the market was mainly driven by owner-occupiers selling for lifestyle reasons, and were therefore more willing to reduce their asking price to sell and move into a more suitable property sooner.

Chris Sykes, associate director and mortgage consultant at Private Finance, said it was unsurprising that some property prices had been discounted.

He said: “To complete a chain and save themselves up to £15,000 in stamp duty, as well as not waste potentially thousands they have already spent on surveys, broker fees, legal fees - it’s no surprise some property prices have been discounted to encourage interest.”

It comes as house price growth slowed for the first time in six months in January as the market approached the deadline for the stamp duty holiday, according to Nationwide’s house price index.

Buyers were also pressing ahead in the first month of the year, according to Chestertons, with 12 per cent more property purchases agreed in January compared with last year and 47 per cent more than December.

But the estate agency also said the stricter lockdown measures had “clearly” discouraged many potential buyers from entering the market, as it saw the number of new buyers registering drop by 23 per cent compared with January last year.

Guy Gittins, chief executive of Chestertons, commented: “It is clear that the unprecedented levels of buyer activity that we saw in the second half of last year has cooled.

“This is primarily due to the stricter lockdown measures discouraging people from continuing their search and the fact that the chances of beating the stamp duty holiday deadline is now slim for those that have not yet found a property.”

He continued: “However, the extraordinary amount of buyer interest we saw towards the end of last year is still converting into record levels of agreed sales as people are pushing hard to get the purchase completed as soon as possible in order to take advantage of the stamp duty saving and to enable them to adapt to the current circumstances.

“There is clearly still a lot of confidence in the market and a lot of people wanting to move and we are very confident that the market will pick up very quickly once lockdown restrictions start to relax.”

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