What Does the Stamp Duty Holiday Mean for You?


Gary Oxborough is Practice Principal at Barlow Irvin Financial Services. As our mortgage expert, he explains why should act now to make the most of these savings.

In his recent Summer Statement, the Chancellor, Rishi Sunak, announced the temporary suspension of stamp duty up to 31st March 2021 on properties up to £500,000. This could save thousands of pounds from the cost of buying a house, which could be put to many good uses. If you have already budgeted for the cost of stamp duty, then why not use that saving as a top up to your deposit, meaning your mortgage would be smaller? This could mean that your mortgage falls into a lower loan to value bracket, therefore saving even more on the overall cost of your property.

As an example, on a purchase price of £250,000, reducing the loan to value from just over 80% down to 80% could save over £500 per year in mortgage costs by reducing the rate from around 1.9% to around 1.4%*.

We speak a lot about regular reviews for clients, and with the correct planning, these savings could continue year after year, growing to a significant sum over the term of your mortgage.

This stamp duty saving is also applicable to buy to let purchases, although they will still be liable for the additional 3% surcharge that is levied on additional properties. Again, this saving could be put towards reducing the mortgage, or may be the starting point for your savings towards the deposit for you next property. It may only be a relatively small amount, but it is a start.

This saving is already in place and runs for all completed purchases to the end of March next year. If you are considering buying a property and taking advantage of this saving, please do not leave it too long. There will be a rush to get purchases completed before the end of March and we have seen before how deadlines like this can cause delays with both mortgage lenders and solicitors being overworked, which may cause you to miss the deadline and then having to pay stamp duty that hasn’t been budgeted for.

* Based on mortgage rates at July 2020 for a residential purchase of £250,000 with a repayment mortgage over a 25-year term on a 2-year fixed rate mortgage.

Time to talk?

If you’re thinking of making the most of the stamp duty holiday, it makes sense to get in touch.

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments.

About the author 

The Barlow Irvin Team

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