Stamp Duty Holiday - What does it mean for Investors?

Last week we reported the Stamp Duty Holiday announcement from Chancellor Rishi Sunak. Now that the dust has settled on this, what does it mean for UK investors?

Savings can be huge

The announcement intended to supercharge the UK Property Market. Whether it needed this level of injection is up for debate as we’ve had a high number of investment and enquiries throughout the pandemic. However, anything, where investors can make savings on fees that are out of our hands, is a big plus for us.

Stamp Duty

As you can see, there’s a bracket above £250,000 where savings from the stamp duty holiday show and huge savings can be had. This is due to the percentage change from an incremental amount on a standard 3% increasing to 5% dependent on property value, becoming a flat 3%. This results in substantial savings for investors in this bracket.

Any saving is a good saving

Even though the savings aren’t as prevalent at lower brackets, they’re still an advantage. We’ve seen investors taking advantage of the savings they’ll make on stamp duty holidays to encourage their reservation fee placement on our properties. Our typical reservation fees can range between £2,000 and £5,000, so if investors are saving £1,500, this means their reservation fee is an easier decision.

Mid section of man calculating bills on mobile phone

What this does is pushes people into making a slightly more significant investment than perhaps they may have made previously. The stamp duty remains 3% on all properties – prior it was only 3% up to a value of £125,000, so now investors can be slightly more adventurous with their portfolio and perhaps look above due to the saving.

The UK Property Market is resilient

But was there such a need for this injection? We have seen reports of some developers stopping work entirely over the pandemic, we always read about projects ceasing to continue due to funding issues (all Heaton Group projects are 100% funded before build so we still complete, regardless). So we understand the requirement to inject some interest back for them, and we welcome more activity in the property market.

Row of Houses in London

But what we’ve seen over the course of our history is that the UK Property Market is strong enough to withstand huge events like the global pandemic. The recession in the mid-’00s saw property values plummet, however over the course of the last ten years; these numbers have returned with gusto, seeing values now rise far above previous numbers and beyond. You only need to look at the investment being put into areas such as Manchester and Preston to know why that is.

Time to Invest?

The stamp duty holiday is set to be with us until early 2021. The Heaton Group have several developments due to complete that year. Due to the off-plan nature of our potential investments, we always encourage investors to get involved as early as possible directly for the most significant savings and eventual property values. Properties we promote off-plan at release are often valued upon completion at a much higher price. It’s all about maximizing the potential yield!

To speak to us regarding your next investment, please email us on info@heatongroup.co.uk or call 01942 251945

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