“Those who are feigning hysterics that everything in their pipeline will fall-through on April 1st are being swept along by media hyperbole,” says Russell Quirk.
The majority of UK home buyers in 2021 are not being motivated by the Stamp Duty Holiday, despite the narrative currently being told throughout papers and news channels.
According to exclusive market research from Moving Home Advice, when asked what their motivation is for buying a property at the moment, only 29% of home buyers named the Stamp Duty Holiday.
With house prices at an all time high, many outlets and commentators are of the opinion prices and market demand will tumble once the stamp duty holiday has ended in April.
But these findings suggest that the housing market will remain strong throughout the next 12 months at least because almost 40% of buyers confirm that they would be looking to buy regardless of the current political, or socio-economic climate.
Emotional value trumps everything
With the majority of buyers eager to move regardless of whether there is a Stamp Duty holiday or not, there is clearly a different motivation at play causing the 47% surge in market demand being reported in recent weeks.
Covid-19 and its subsequent lockdowns is likely the biggest factor at play. People are feeling agitated by being stuck indoors, cramped into small homes, lacking any private outdoor space. As such, they’re looking for something new.
Furthermore, the new lifestyles being thrust upon us during the pandemic are contributing to a shift in personal values and life aspirations. Fresh starts and new homes are a natural result of this change. Although, of course, a stamp duty saving is a welcome cherry on top.
Long-term profit takes a backseat
With house prices at an all time high, some commentators will question why somebody would want to buy a home today, especially if they’re not being motivated by the tax relief of the SDLT holiday. Surely it would be wiser to wait for prices to fall if you’re not desperate to make a cash saving?
But the Moving Home Advice research shows that less than 30% of buyers consider it ‘Very Important’ for their home to increase in value after purchase. In fact, 21% say it’s not important at all.
This suggests that many commentators are incorrect in their market projections because they’re putting too much weight on the financial and economic motivations for home buying and not enough on the emotional factors.
Commenting on the survey results, Moving Home Advice’s in-house property expert, Russell Quirk, said:
“Despite the stamp duty holiday having a clear and positive impact on the housing market, this survey proves that it is not the only thing underpinning the market as many would have you believe.
“As such, if it does indeed end on March 31st, it will not be the catastrophe that many are thinking because there is far more at play.
“Whilst agents may be screaming at Sunak on the TV, pleading for him to extend the tax relief, they should take comfort in the fact that it appears the market will stay strong regardless.
“There are some people suggesting that all of the 250,000 transactions currently in the UK property pipeline will fall-through the instant we reach midnight on 1st April. This is bonkers and wrong. Even if the stamp duty holiday does end as currently scheduled, many of those transactions will have already completed, and 30% of those which haven’t will be first-time buyers who are exempt from SDLT anyway.
“Therefore, those who are feigning hysterics that everything in the pipeline will fall-through are being swept along by media hyperbole.”