- 7 hours ago
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Landlords, estate agents and solicitors are in a last-minute rush to complete property deals ahead of a stamp duty rise that takes effect on Friday.
Anyone buying a home that is not their main residence will face a 3% Stamp Duty surcharge.
In Scotland, the equivalent tax - the Land and Buildings Transaction Tax (LBTT) - is also being up-rated.
From midnight on Thursday the duty on a property sold for £200,000 will rise from £1,500 to £7,500.
"It's been very chaotic. But the real problems will be today," said Rob Hailstone, of the Bold Legal Group.
The problems have been compounded by the fact that some of the fine detail was only announced in the Budget just over two weeks ago.
"It's been ridiculously busy. Buyers have been saying they want to rush it through, because they don't want to pay the surcharge," said Mr Hailstone.
'Bottleneck'
While the theoretical deadline is midnight, the practical deadline is late on Thursday afternoon, when the banks close.
Sales can only be completed when the money comes though from the lender.
"It's a busy crazy day," said Martyn Baum, the President of the National Association of Estate Agents.
"We've all got a bottleneck, and a huge amount of deals before the deadline. I've heard of estate agents and conveyancers staying open till 10pm, and then opening again at 5am this morning."
The stamp duty surcharge will affect landlords purchasing buy-to-let property, or anyone who is buying a second home.
But many ordinary buyers are involved in chains which involve an investor somewhere along the line - so they too have been caught in the chaos.
| Stamp Duty Bands | ||
|---|---|---|
| Price band | Standard rate | Buy-to-Let/ 2nd home |
| Up to £125,000 | 0% | 3% |
| £125,001 to £250,000 | 2% | 5% |
| £250,001 to £925,000 | 5% | 8% |
| £925,001 to £1.5m | 10% | 13% |
| £1.5m+ | 12% | 15% |
| Source: HMRC | ||
Earlier this week, the Bank of England announced plans to subject landlords to a series of new affordability tests.
Their personal income and expenditure could be scrutinised by lenders before they decide to give them a mortgage.
Landlords may also have to prove that they could afford a rise in borrowing costs.
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