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Stamp Duty cliff edge could “derail” market warns mortgage firm

A mortgage firm specialising in high net worth clients says the stamp duty holiday cliff edge will not impact the most expensive part of the property market - but could “derail” mainstream buyers and sellers in early autumn.

Enness Global Mortgages claims that a drop in typical house prices and transaction levels were both expected following what was to have been the end of the holiday in late March. 

However, the Chancellor’s decision to extend the stamp duty holiday in a tapered fashion until the end of September means the much-feared cliff edge has been partly avoided - for now. 


Despite this relief, the analysis of buyer sentiment by Enness shows that the market fall will be felt far harder by mainstream buyers and sellers than at the higher end. 

Its research shows that 39 per cent of recent buyers with a household income up to £34,999 were motivated by the stamp duty holidays, as were 39 per cent of buyers with a household income of £35,000 to £69,999.

Only 16 per cent of buyers with income between £70,000 and £99,000 admitted they bought because of the holiday - and only six per cent of buyers with a household income of £100,000 or more were incentivised by the holiday.

Enness chief executive Islay Robinson says: “We’re currently seeing a very hot market driven by positive buyer sentiment, sentiment that has been fuelled by the low cost of borrowing and the additional saving in the form of a stamp duty holiday. However, we're already seeing some lenders start to reign in their lending and tighten their criteria which is proving problematic for homebuyers in the lower price tiers of the market. While a stamp duty reprieve is enabling many of these buyers to boost their deposit savings pot in order to secure a mortgage, it suggests that the approaching cliff edge is going to be far steeper across these lower price thresholds when it does hit.

"In contrast, the high-end market has been building a slow but steady head of steam in recent months. While the stamp duty holiday has certainly been a nice saving to make, it has been far from the driving factor. Of course, those transacting at these higher price points are also much better placed when it comes to arranging finance and this isn’t dependent on interest rates remaining at record lows.

"As a result, while there is a very real chance the general market could derail come the end of the stamp duty holiday, this is unlikely to be the case for the high-end market and we expect this more natural return to form to continue far beyond September.”

  • Matt Faizey


    HMG could have easily done the maths and realised the stamp duty exemption would only over-cook things.

    There were @900k completions put on ice during the Brexit uncertainty. Those who actually knew the market knew that Jan/Feb/Mar last year were veey busy.

    Then, if they'd actually spoken to the public Or at least to those who were they'd have known there was no crash coming. All through April 2020 the public were clear about 'sitting & waiting'.

    But, no. Instead of carefully considering who to take advice from we had this stupid stimulus.

    Price rises have WAY outstripped savings. Nobody has saved anything.

    In a market where house prices have outstripped wage growth and inflation for decades we have now had huge inflationary measures.

    We have a market place now where movers are beyond busy, to very unpleasant levels.

    Same for conveyancers and estate agents.

    This policy is not a roaring success. It's brought forward completions from 2021(late)&22 into 23 all into a short window.

    A 'derailment' is coming for the simple reason that demand has been squished forwards.

    Demand will run out.

    Six months of quiet - bring it on!

  • Matt Faizey

    Deleted as accidental second post

  • Matthew Payne

    On budget day, I predicted the copy and pasted emails from January about cliff edges and extensions would start again Mid -April. I was wrong!


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