This year was a curveball with devastating and surprising effects on our lives. The Scottish property market started the year off strong only to almost die during the months of lockdown and pick up again when restrictions eased.
To give the property market a boost during the toughest months of Covid, the Scottish Government increased the starting threshold for the Land and Buildings Transaction Tax (LBTT) from £145,000 to £250,000. The LBTT holiday meant that 80% of homebuyers pay zero LBTT on property purchases until the holiday expires on March 31st 2021.
Keep reading as we explore what could happen if the LBTT holiday isn’t extended and share some useful tips to help you close your property transaction before Scotland’s stamp duty (LBTT) holiday deadline.
When lockdown restrictions eased, the Scottish property market bounced back quickly, and people were eager to get moving on buying and/or selling their property. The LBTT holiday plays a significant role in the ongoing activity as people want to take advantage of the tax relief while it’s still in place.
Scotland’s property market is one of the most active in the UK at the moment. The volume of property sales in Edinburgh, the Lothians, Fife and the Borders increased by 31.6% August to September compared to last year. Additionally, the median time for a property to be placed under offer is 17 days, which is four days faster than last year.
While the property recovered quickly after our first lockdown is excellent news, the sudden surge also comes with its complications.
According to Zoopla, 92% of sales agreed in November typically close by the end of March the following year, then drop to 54% for sales agreed in January and 17% in February. The stagnant months of lockdown created an astronomical backlog of cases that estate agents, surveyors, and solicitors need to clear while dealing with a new wave of requests.
Additionally, the property sales pipeline is 50% bigger than last year, with 140,000 more home sales in the system. This increase puts pressure on estate agents, lenders, valuers, surveyors and other professionals in the housing market. As a result, delays are almost inevitable for everything from getting mortgages approved to getting valuations done.
At this time, those looking to buy or sell a house should be aware they could miss the LBTT holiday deadline on March 31st 2021.
Some property experts warn about a risk of zero growth in house prices with the possibility of falling numbers after the LBTT holiday ends because the cut-off point is “too abrupt”. Others suggest the demand still outstrips the supply and the property market is “miles off the mark” from building enough homes for the increasing demand.
In case the government doesn’t extend the LBTT holiday, homebuyers and sellers must act fast to improve their chances of completing their property transaction before the end of March 2021. Most homebuyers need to sell their own property first, so it’s best to secure an offer on your current home before you make a move on a new one.
Here are a few things you can do to speed up the transaction process and beat Scotland’s LBTT holiday deadline:
Ask different agents to value your property and choose the one that works best for you. Base your decision on their expertise in your area, their success rate for selling properties similar to yours, their fee and customer service quality.
While it’s tempting to be swayed by the agent promising the highest price for your property, over-pricing it will only prolong the process and increase your risk of missing the holiday deadline. Instead, ask the agent for evidence to support their recommended asking price before you decide.
Spend some time decluttering your home to make it look as attractive and presentable as possible to home hunters. That way your estate agent can get straight to work to put your property on the market, which saves you both time. A picture is worth a thousand words, so you want to have high-resolution images of your bright, tidy, well-presented home to create maximum interest.
Anyone selling their property in Scotland must obtain a Home Report to have available for prospective buyers and their agents while the property is on sale. Sellers must have the Home Report ready and available to potential buyers before the property goes on the market. So get yours now to get your home ready sooner!
When looking for a solicitor, try to find out what their workload is like in the coming months to determine if they have the capacity to take on your conveyancing. Waiting until after a seller accepts your offer on their property will only lose you precious time.
Many things can delay a property transaction, but our fast and pain-free process means you won’t have to worry about providing sellers with a Scottish Home Report on time.
The Home Report Company take the hassle out of Home Reports in Scotland and help you build trust with potential buyers by providing clear and easy-to-read documentation for complete peace of mind.