Around 1.3 million homebuyers took advantage of a UK government tax break on stamp duty, but those who missed the Wednesday deadline were left facing thousands of pounds in added costs.
The tax duty holiday, in place since July 2020, offered savings of as much as £15,000 for those who took advantage. But it will now be phased out and ended altogether at the end of September 2021.
Experts have also cautioned that the rush to complete deals before the deadline led to an unprecedented rise in house prices that may even outweigh the stamp duty savings.
London-based Kim Kaveh was among those who missed the deadline, with a lost document likely to see her miss out on as much as £8,000 in savings.
“I’m gutted. I’m so disappointed that through no fault of my own I’m having to fork out thousands of pounds that I didn’t anticipate spending to pay stamp duty,” she told City AM.
“I would have bought without the stamp duty holiday, but my decision was definitely rushed because I wanted to save the money. It was a strong incentive to try to get on the ladder. Now the money it’s going to cost me in stamp duty will mean I can’t afford to furnish the flat properly.”
Property prices rose by more than 13 per cent in the year to June 2021.
Darrel Welch, of MIAC Analytics, a mortgage and financial services consultancy, said the tax relief “was an initiative designed to reboot a property market that had effectively stagnated as the pandemic and lockdown measures delayed completions and made house viewings virtually impossible.
“One of the unintended consequences of the stamp duty holiday has been a gold rush to complete before the respective deadlines, with the unprecedented demand pushing up prices in return.”
Research from credit card company Tymit suggests that 31 per cent of property owners rushed into buying a home because of the stamp duty relief and two thirds failed to account for the costs of moving in.
Clare Seal of the Financial Wellbeing Forum said: “I hope the millions of prospective home movers think long and hard about what their new home will really cost them,” as the stamp duty comes to an end.
“Whether you’re buying a new build or embarking on a renovation project, bad budgeting can all too often transform your dream home into a living nightmare, complete with dodgy mechanics, empty rooms and costly loans,” she said.