All Properties in Sales Progression Missing out on Stamp Duty
The number of properties currently in sales progression – defined as those properties in-between having a sale agreed and completion – is 580,699.
The following chart shows the volume of these properties that will potentially miss out on the Stamp Duty Holiday if the deadline is kept the same as it is on 31st March 2021 and if the deadline is extended by 6 weeks to 12th May 2021.
The number of these transactions that we have calculated that will potentially NOT be completed by 31st March 2021 is 374,203.
At this stage it is important for us to “triangulate” this number, as we said at the outset of this client briefing that this was 325,000 in October 2020. The differences are that the 325,000 only included sales agreed until the end January 2021 (so this number has 17 days more sales agreed) and it is also higher because more sales were agreed in January than we had modelled.
The key takeout being that the 374,203 number is validated by our prior analysis and vice versa.
If we say that the Chancellor extends the Stamp Duty Holiday by 6 weeks, the 374,203 number falls to 281,157. In other words, 93,046 sales will have completed in the six-week window. However, readers will note that the number of people missing out on the holiday is still substantial at 281,157.
There is a big push back to the analysis above in that if you agreed a sale last week, you could not reasonably expect to get it through by the end of March and as these numbers are up-to-the minute, whilst we think they are accurate, they are not really that relevant.
So where should we draw the line?
Sales Agreed in 2020 Properties in Sales Progression Missing out on Stamp Duty
If for example we said that in “normal” times those people agreeing a sale in 2020 would have reasonably expected to save via the Stamp Duty Holiday, and those that have agreed a sale in 2021 would not reasonably expect to benefit from Stamp Duty savings (which is roughly what it would have been in terms of average progression times in say 2019), then the numbers change and we have shown this in the following chart.
Now there are 370,137 transactions in progression. These are those that have not yet completed and had a sale agreed prior to 2021. Of these 171,372 will potentially NOT be completed by the 31st March 2021. If the Chancellor extends the Stamp Duty Holiday by six weeks, then this number reduces to 116,115.
Thus saving 55,257 buyers from having to pay Stamp Duty at higher rates.
Having reported on this topic for some time, clearly, we welcome any intervention by the Chancellor to extend the Stamp Duty Holiday end date and ensure that buyers with in-flight transactions can still benefit from these savings, however, as you can see, there are still a substantial number of transactions that will be affected even by a revised “cliff edge” date.
As always, we will keep an eye out on future developments for you.