Is it too late to beat the stamp duty increase in Norfolk?
As the housing market in Norfolk, and across the UK, braces for the impending stamp duty changes set to take effect on 1 April2025, many homebuyers are questioning whether it's still feasible to finalise their purchases under the current, more favourable stamp duty rates.
Understanding these changes, the typical timelines for property transactions, and strategies to expedite the buying process are essential for those aiming to beat the deadline before it’s too late.
What are the upcoming stamp duty changes?
Since 23 September 2022, the stamp duty land tax (SDLT) structure has allowed homebuyers to pay no tax on properties in England and Northern Ireland priced up to £250,000 (Wales and Scotland have their own stamp duty structures).
However, from April 1, 2025, this nil-rate threshold will revert to its previous level of £125,000. With the average house price in the UK currently sitting at just shy of £300,000 (and £300,572 in Norfolk), this means anyone purchasing a property at this price will see an increase in stamp duty from £1,000 under the current rates to £3,500 from 1 April 2025.
First-time buyers will also feel the impact. Presently, they enjoy a nil-rate threshold up to £425,000, which will decrease to £300,000 as of 1 April 2025. In addition, the maximum property price eligible for first-time buyer relief will drop from £625,000 to £500,000. This means that first-time buyers purchasing a property priced at £400,000 after the changes to stamp duty will face a stamp duty bill of £5,000, whereas they currently pay no tax on such a purchase.
Recent surge in house sales
Anticipation of these tax increases has led to a notable uptick in property transactions since Chancellor Rachel Reeves announced that Labour planned to go ahead with the April 2025 stamp duty changes in her Autumn Budget. In December 2024, the housing market experienced a significant surge of almost 20% compared to December 2023,and was 3% up on November 2024 according to HMRC.
Average time to complete a house purchase.
But is it possible to complete a house sale prior to the fast-approaching stamp duty deadline?
The timeline for completing a house purchase can vary based on several factors, including property type, location, and the complexity of the transaction. On average, the process takes between 8-12 weeks from the acceptance of an offer to completion, although it can happen in as little as 6 weeks, especially if you have already secured a mortgage and conveyancer. The buying process is also generally quicker for first-time buyers since they’re at the start of the chain.
Once an offer has been accepted on a property, the purchase encompasses several stages:
1. From offer acceptance to property searches: Approximately 5 weeks
2. From searches to exchange of contracts: Around 8 weeks
3. From exchange to completion: 2-4 weeks, although it is possible to complete and exchange on the same day.
Given these timelines, initiating the buying process promptly is essential for those aiming to complete before the April 2025 deadline.
Strategies to expedite the buying process.
For local buyers in Norfolk looking to accelerate their property transactions now or in the future, it is useful to consider the following steps:
1. Obtain a mortgage agreement in principle: Securing this agreement early demonstrates to sellers that you are a serious buyer with the financial means to proceed, potentially expediting negotiations.
2. Instruct a conveyancer as early as possible: According to local estate agents Yopa, researching conveyancers as soon as you begin your property search means you don’t waste any time during the conveyancing process and can instruct them as soon as your offer is accepted.
3. Organise finances: Ensure that your deposit and any other necessary funds are readily accessible to prevent financial hold-ups during the transaction.
4. Maintain open communication: Regularly liaise with your estate agent, solicitor, and mortgage advisor to promptly address any queries that arise and ensure a prompt response to any of your queries.
5. Consider chain-free properties or online property auctions: Purchasing a property with no upward chain or via auction can significantly reduce the time to completion, as it eliminates dependencies on other transactions.
So, whilst the window is certainly narrowing, it is still possible for determined buyers to finalise their property transactions before the stamp duty changes on1 April 2025. Acting swiftly and expediting the buying process means you may just mitigate the financial impact of the forthcoming stamp duty increases.
