As buyers and sellers flock to take advantage of the relaxation, it’s no wonder the industry’s seen a staggering 22% increase in monthly property transactions. That’s the equivalent of 171,303 extra deals compared to the same time last year.
But all good things must come to an end.
So it goes with the SDLT holiday, which begins winding down on June 30th, followed by a staggered return to previous rates by October 1st.
Spotting trending changesAs the SDLT holiday draws to a close, it’s inevitable that practices are going to see a major drop-off in business.
There’s no evidence to suggest that, past the cut-off date, transactions will remain at a high. Indeed, official figures show the ‘mad rush’ to buy property was already slowing by April, with a 36% decrease compared to March.
Maintaining equivalent levels after record sales, then, means finding new clients – and, at the same time, getting yourself in front of them.
First, you’ll want to look at how the market is changing.
The data shows it could be a prime time for First-Time Buyers (FTB).
Back when the stamp duty holiday was announced, the share of FTBs using our platform dropped from 55% to 48% - so, while absolute volume remained the same, at the same time, there was a surge in non-FTBs leaping into action to take advantage of the holiday. No surprise, perhaps, given that it benefits non-FTBs more.
At the start of the year, the FTB share reset itself. Again, that’s unsurprising; the holiday was due to end in March. As a result of the extension, it dropped back slightly – so now, with it coming to an end, we can expect to see FTB share increase as the taper begins, rising further by the end of the holiday later this year.
· Average prices
The data also points to a potential drop in average prices.
Over the last year, the average price by buyer type jumped, in part because by saving on stamp duty, they were able to put down bigger deposits on more expensive properties. That’s unlikely to continue past once the holiday ends.
· Investor share up
Look out for a slight increase in investor share of the market.
|2021 average price||£361,177||£255,542||£198,695|
|SDLT (before end June)||£0||£0||£5,960|
|SDLT (before end Sept)||£5,558||£0||£5,960|
|SDLT (after holiday)||£8,058||£0||£7,434|
Here we see the stamp duty paid by each buyer type, for their average purchase price so far this year – segmented by holiday, partial holiday, and post-holiday.
FTBs paying on average £255k will not pay SDLT in any of these scenarios, while buyers benefiting now will start to benefit less after the end of June.
The average price of an investor-bought property is low enough that the saving now and the saving beyond June remains the same, so relative to buyers, it’s possible we’ll see an increase, however small, in investor share of market.
Preparing for the drop-offAs customers continue to shift online, the future of professional services is changing. People are more at ease finding and buying everything from Cadbury’s Fingers to financial advice on the internet. The days of distrustful customers sending cheques to Amazon are far, far, far behind us.
This is important because customer expectations are changing as a result. And the legal sector’s hesitance in embracing digital transformation – it’s too costly, too time-consuming, too much hassle compared to how we usually do it – risks putting it at a distinct disadvantage.
While we may not see the SDLT holiday market completely dry up until almost the end of the year, now is the ideal time to begin preparing to get ahead of the competition.
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