On July 8th, 2020 the government announced a six month stamp duty holiday in a bid to support housing market activity in England and Northern Ireland following the first period of lockdown. This was the first stamp duty holiday since 2008.

The holiday means that properties valued up to £500,000 do not attract stamp duty on the purchase, and this has prompted a period of growth in house prices as intended. However, in December the growth of house prices slowed down, suggesting that the honeymoon period may be over as would-be buyers considered how likely purchases would be to complete before the stamp duty holiday finishes at the end of March 2021. Some pundits, however, speculated that the slowdown could also be due to the natural decrease in activity at the end of the year, coupled with a new period of lockdown being announced.

Who benefits from the stamp duty holiday?

In theory the holiday benefits only buyers as it is those making a purchase that pay the stamp duty. However, based on activity in 2008, the suggestion is that sellers also benefit as reductions in selling price are limited by knowing a potential buyer has more spending power.

Buy-to-let landlords may, on the face of it, appear to have been missed in the holiday handout as the additional stamp duty charge for purchases of properties that are not a main residence was not changed. However, the current stamp duty holiday still reduces the stamp duty bill considerably.

Will landlords be at an advantage?

While those looking for a new main home are typically tied up in chains that can slow the purchase process, landlords looking for new buy-to-let properties can usually move more quickly. That being the case, it is expected that landlords will still be seeking to take advantage of the current stamp duty holiday period. 

Letting agents and those involved with property management are therefore likely to see a busy period for property inspection towards the end of the stamp holiday period as property changes hands close to the deadline. Those with the advantage of being able to use property management software to help manage the load will likely experience a smoother process and greater overall client satisfaction.

Impact on new and existing landlords

The stamp duty holiday prompted many landlords to review their portfolios and change them to meet the changing demands of tenants. New investors and those absent from the buy-to-let market have also increased as they sought to take advantage of the benefits of the stamp duty holiday.

This increase in landlords and churn in properties has seen increasing demands on letting agents and property managers. Many have seen the benefits of using an end-to-end property management software solution such as InventoryBase.

Landlords have experienced many challenges in the last year due to periods of lockdown, restricted viewings and slower legal processing when buying new properties and turning around tenancy agreements. These challenges have been stressful for many landlords, particularly those returning to the market or new to it. Being able to use property management software to communicate, manage appointments, track events and review historical reports significantly streamlines the process for both property professionals and landlords.

Impact on March 31st

Experts opinions vary as to the overall impact of the stamp duty holiday coming to an end. While some predict a significant slowdown, others expect purchases in progress to largely continue. Undoubtedly there has been an increase in property prices due to the activity experienced at the end of last year, so there may be a brief period of settlement. However, overall opinion seems to be that the impact on the market has been for the good and that any changes at the end of March will likely be short lived as demand for property continues into 2021.