The Chancellor Rishi Sunak is coming under increasing pressure to extend the stamp duty holiday, as prospective buyers face missing the 31 March deadline.
The tax break, introduced in July, means buyers in England pay no stamp duty on properties costing up to £500,000 or a reduced rate for homes above that, meaning savings of up to £15,000.
However, the surge in demand generated by the move, coupled with covid-19 restrictions, has led to conveyancing and mortgage approval bottlenecks, meaning many buyers will struggle to complete on their purchases in time.
Figures from across the industry have called for the Chancellor to extend the holiday, in his budget on 3 March, at least for buyers who have exchanged contracts.
Natasha Heron of accountancy firm Hillier Hopkins said: “The stamp duty holiday has created a degree of urgency in the market, with many home buyers and sellers struggling to get their deals across the line before the end of March.
Buying and selling at the same time?
Here are 10 things that could go wrong, and often do go wrong, and what, if anything, you can do to avoid them.
Buying and selling at the same time?
Here are 10 things that could go wrong, and often do go wrong, and what, if anything, you can do to avoid them.
“As a result, we would expect to see in the coming weeks an increased number of deals that fall through. That is why we would urge the government to, as a minimum, extend the stamp duty holiday to those properties that have exchanged but [are] yet to complete, or even better, extend the holiday through to September.”
Michael Ball, Professor of Urban and Property Economics at the University of Reading, said the surge in demand caused by the policy is creating significant logjams in the sales. “It’s part of the reason why the Treasury may be thinking now that it wasn’t the brightest of ideas. The Chancellor appears to believe he can second-guess the housing market, but that’s an almost impossible thing to achieve – I think they’ve made a serious mistake with this policy.”
A petition on the issue has received more than 125,000 signatures. In normal circumstances 100,000 signatures are enough to trigger a debate in the House of Commons. However, all such debates are currently suspended as a result of coronavirus.
The stamp duty holiday is also believed to have led to a huge jump in London house prices at the end of last year. The average cost of a home in the capital topped the £500,000 threshold for the first time as house prices rose by four per cent between October and November, according to Land Registry data.
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