Call on the Chancellor to extend the Stamp Duty holiday

A concerned group of estate agents and property industry leaders write to the Chancellor to call for the Stamp Duty holiday to be extended for an extra 6 months

As the market struggles to keep up with the surge in demand for residential property sales, the government has been urged to extend the stamp duty holiday. An extension of an extra 6 months, could mean that homebuyers don't miss out on potential savings of up to £15,000.

In a joint letter to Rishi Sunak, a group of estate agents and industry leaders have called for this extension of up to 6 months to be announced before Christmas.

Earlier in July 2020, the Chancellor announced that the first £500,000 of the purchase price of a main residence would be exempt from Stamp Duty until 31st March 2021.

The group has emphasised to the government their concern that the property industry does not have the sufficient capacity to deal with the increased demand caused by the urgency to complete the qualifying transactions within the set deadline.

The joint letter which was signed by a number of property firms and trade bodies, including The Guild of Property Professionals, NAEA Propertymark, the Residential Property Surveyors Association, BAR, Conveyancing Association, Society of Licenced Conveyancers, the House Buying and Selling Group, Simplify, Purplebricks, Mortgage Advice Bureau, and Landmark, will be sent to Rishi Sunak later today, urging the chancellor to extend the stamp duty holiday until September 2021.

The group wrote: “Movers will apply pressure to complete transactions by 31 March in order to benefit from the changes to Stamp Duty Land Tax and to meet the Help to Buy requirements.

“Failure to complete those transactions could see the breakdown of chains with consumers potentially financially unable to continue with the purchase, as they would have to find funds to pay stamp duty.”

"Disruption caused by Covid-19 has driven up average property transaction times from 12 to 20 weeks putting home movers at risk from missing the stamp duty deadline", the group said.

It added: “By acting now, the government can release the pressure in the system to allow transactions to complete and avoid a disorderly and distressing period for movers and businesses throughout the market.

“Any extension or gradual phasing of the SDLT would also help mitigate sharp reductions in consumer demand. More widely, a buoyant housing market drives consumer confidence in the wider economy whereas constrictions on lending and falling house prices lead to reduced consumer confidence and a material reduction in economic activity.”

Mark Hayward, chief executive of NAEA Propertymark, also commented: “The joint letter sent to the Chancellor today is an important step in protecting those in the process of buying or selling a house that might miss out on the 31st March stamp duty deadline because of increased pressure on service providers within the industry which is causing delays for buyers and sellers in the sector.

“The group endorsing this letter represents the breadth of the home moving process including estate agents, search agents, mortgage intermediaries, conveyancing, surveying, energy assessors and removal companies.

“The boom, caused by the stamp duty holiday, has been hugely beneficial for the housing market; however, the stamp duty cliff edge on the 31st March could cause thousands of sales to fall at the final hurdle and have a knock on and drastic effect on the housing market which has recovered well from the Covid slump.

“We are calling on government to rethink these timings, so pressure on the system can be released to allow transactions to complete and avoid a disorderly and distressing period for movers and businesses throughout the market.”

The stamp duty holiday and pent-up demand caused by the Covid-19 crisis, has left an increase of 140,000 buyers waiting to finalise their home purchase, compared with the same period last year, as people rush to complete before the imposed deadline.

Worryingly, the latest figures from property data analysts TwentyCi suggest that approximately 325,000 buyers may not be able to complete before the 31st March 2021 deadline, because of the increased demand on conveyancing, surveying, mortgage and search services. Which is why an extension of an extra 6 months to the stamp duty holiday by the government, would be seen as a very welcome move by many.