Making The Most Of The Stamp Duty Holiday Extension
What Is Stamp Duty?
Stamp duty or Stamp Duty Land Tax (SDLT) is a tax applied to house purchases in England and Northern island. It is named so because there had to be a stamp on crucial documents for a house purchase to exchange. The tax applies to freehold and leasehold properties, and for mortgaged properties and those purchased outright.
What Is The Holiday? (What Has The Government Done and Why)?
Earlier in 2020, Chancellor Rishi Sunak put stamp duty on a holiday, pausing it for properties costing less than £500000 until April 2021. This was to allow for the economic fallback from the pandemic. Many in the property sector are asking Sunak to extend the stamp duty holiday six months to prevent an overload for those working in the property industry.
When Is The Deadline, And Why Do You Need To Start Looking Now?
Financial services giant Legal & General say that those that want to take advantage of the stamp duty holiday should start their search by November 1st 2020. Others say that December 1st could also be suitable, giving buyers 16 weeks from the end of the stamp duty holiday.
The process of purchasing a property is taking longer than usual, due to a backlog of people wanting to take advantage of the reduction in stamp duty. Legal & General estimate that purchasing a home takes approximately 15 to 17 weeks, with the latter being more appropriate for buyers with more complex requirements.
However, a second lockdown could throw a further spanner in the works and may halt property purchases altogether. To compare, before the pandemic, a mortgage application for a buyer with straightforward circumstances would take about two weeks.
Experts have suggested to chancellor Sunak that perhaps a tapering of the stamp duty holiday would be more appropriate, considering the uncertainty of Britain’s economy.
Can Bridging Loans Speed Up The Process?
Bridging loans are fantastic between times when funds are needed and when funds are going to be released from an asset, most commonly a property. They are short term quick loans.
Bridging finance is an excellent way for homeowners and property developers to speed up the process. They are perfect for property purchases and sales because funding is easily and quickly accessible. Most bridging loans have predictable costs when there is an exact repayment schedule, and so are great for when buying a house in a time-sensitive situation.
Funds are released quickly, and credit checks are not as extensive as the equity of your property secures the loan instead of your credit history. Bridging loans are a great option, even for those with bad credit.