Residential properties in view of the Canary Wharf in London, UK.Photographer: Hollie Adams/Bloomberg
LONDON: England’s capital faces the biggest bottlenecks of house sales in the United Kingdom as buyers and sellers rush to complete deals before a property tax increase comes into force, Rightmove says.
The number of first-time buyers trying to tie up transactions in the capital is almost a third higher than at the same time last year, the property website said yesterday in a report.
Those looking to get onto the property ladder are scrambling to complete deals by April, when the price threshold at which the stamp duty levy becomes payable is due to be lowered.
“For those in higher-priced areas of England like London, the additional stamp duty charges they face can be significant and difficult to afford,” Colleen Babcock, a property expert at Rightmove, said in a statement.
“The lengthy and frustrating completion process means that the average mover has had to have one eye on the clock since November to ensure that they complete before the stamp duty deadline.”
Current rules relieve homebuyers from paying stamp duty on the first £425,000 (US$535,000) of a purchase.
On April 1, that threshold will be lowered across the board, with new bands of the tax introduced.
In London, first-time buyers could see their stamp duty charges increase by as much as £10,000 as a result, according to Marc von Grundherr, director of Benham and Reeves in London.
Rightmove expects the capital will see “the biggest logjam of first-time buyers trying to complete before March.”
The backlog extends beyond the UK capital. Nationwide, there are over half a million home sales going through the completion process, a 25% increase from February 2024, Rightmove said – a sign that some will struggle to meet the deadline.
The lengthy homebuying process doesn’t help. Transactions take an average of five months due to requirements for document exchanges and property and identity checks between mortgage providers and others.
In a bid to speed the process up, the Labour government announced plans last week to use digital identity verification and data-sharing. That’s part of Prime Minister Keir Starmer’s ambitious plans to make housing more affordable by building 1.5 million new homes by mid-2029.
Even without the stamp duty increase, homebuyer ability to afford price rises remains stretched. — Bloomberg
