Stamp Duty holiday to come to an end

The stamp duty holiday, which has saved property buyers thousands of pounds in taxes, is to be rbought to an end at the end of the year.

The government enacted the break that frees buyers of an obligation to pay stamp tax if the property they purchase is under £175,000.

As the best deals are going to mortgage customers with a deposit of around 25 per cent, the discount worth as much as £1,750 could be a big help to some buyers.

L&C Mortgages is encouraging those looking to purchase a home to act now, if possible.

“As house purchases can take months to complete it is make-your-mind-up time for those considering buying a property,” said L&C’s head of communications, David Hollingworth.

He continued: “With house prices now holding up more strongly and in some cases rising, the stamp duty holiday will prove to act as a greater incentive as the deadline approaches.”

There has been speculation that the government will extend the deal to further boost the mortgage market.

In recent months, there have been an increased number of mortgage agreements for first-time buyers and prices have seen a slight uptick.

“It would be nice for them to leave it at the current level. It would benefit the market. Look at how it’s changed,” said Peter O’Donovan, head of mortgages at BestInvest.

“If they do change it, hopefully they tier it properly so everyone ends up paying an equal value,” he added.

Currently, stamp duty is divided into tiers from under £175,000, between £175,000 and £250,000, between £250,000 and £500,000 and above £500,000. The rates are zero, one, three and four per cent respectively.

Members of the property and mortgage industries have long called on the government for a fairer system of stamp duty, where fixed thresholds are replaced with a more fluid set of charges – so preventing artificial price levels at each stamp duty threshold.

Any changes – or an extension to the stamp duty holiday – will come in the chancellor's pre-Budget report expected this autumn.