What does the stamp duty holiday mean for the housing market in Barking and Dagenham?

Newham buyers could save thousands of pounds in stamp duty costs up until March next year. Picture:

Newham buyers could save thousands of pounds in stamp duty costs up until March next year. Picture: Gareth Fuller/PA Wire/PA Images - Credit: Gareth Fuller/PA Wire/PA Images

The stamp duty holiday could save Barking and Dagenham buyers thousands of pounds, according to local estate agents.

Chancellor Rishi Sunak announced this much-anticipated holiday as part of a raft of measures designed to stimulate the economy.

The threshold for stamp duty has been raised from £125,000 to £500,000 until March 31 next year.

With Rightmove estimating the average house price in the borough to be around £320,113, this increase means that prospective buyers will not pay any stamp duty on purchases within this price range for the duration of the holiday.

Mr Sunak said the average stamp duty bill will drop by £4,500 as a result, with nearly nine out of 10 people buying their main home this financial year now set to pay no stamp duty at all.

Previously, the duty payable for residential property stood at 2 per cent on homes priced between £125,000-£250,000, 5 per cent on £250,001-£925,000, 10 per cent on £925,001-£1.5m and 12 per cent on the portion above £1.5m.

Discounts were already in place for first-time buyers up to £300,000 (who then paid 5 per cent on any portion between £300,001-£500,000) as well as a 3 per cent surcharge for second home buyers, which remains unchanged.

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Jeff Vedgen, a branch manager at William H Brown, said the move is “going to excite buyers in some way”: “It will certainly grab the attention and push some people’s plans forward.”

The manager of the agent’s Barking branch was keen to emphasise that, although helpful, he doesn’t believe this holiday will necessarily be a “saviour” for the market.

In his expert view, the best way to restimulate the property market long-term is to reintroduce 10 pc mortgage deposits across the board.

According to Jeff, four out of five lenders stopped such deposits in the aftermath of lockdown, meaning that most mortgages can now only be secured with commitments of 15 pc and above.

Rightmove’s Miles Shipside said: “Lockdown prevented 175,000 would be sellers from coming to market so we hope this stamp duty holiday will provide the spur for those missing movers to come to market.”

He warned that movers could now rush to agree a price on their next home “before some sellers put their prices up in the hope people will be able to pay more because of the tax savings”.