Finance News

Stamp duty holiday to be extended to the end of June

Rozi Jones
|
24th February 2021
Houses house of parliament commons government govt gov
"We will have the same cliff edge scenario in three months with buyers desperately rushing to complete sales, but facing delays due to conveyancing issues."

Rishi Sunak is preparing to extend the stamp duty holiday by three months until the end of June, according to reports.

A source told The Times that Sunak will use next week's Budget to confirm a three month extension to the holiday, enabling people already in the buying and selling process to complete.

Rightmove recently estimated that 100,000 people could face an unexpected stamp duty bill amid delays in the home buying and selling process due to social distancing measures, illness and home-schooling.

Extending the policy is estimated to cost the Treasury around £1bn.

A spokesperson for the Treasury said they cannot speculate on tax ahead of fiscal events.

Guy Harrington, CEO of residential lender Glenhawk, commented: “Whilst a short extension was inevitable given the backlog of transactions, stamp duty has been a strong revenue generator for the government and at a time when it can ill afford to be bleeding money, this is not a long term solution.

"As with Help to Buy, a tapering of sorts would ensure that the relief continues to benefit those most in need, whilst avoiding a situation similar to after the first lockdown where transactions fell by as much as 50%. A housing market correction would only further add to the already considerable economic woes facing UK consumers.”

David Westgate, chief executive of Andrews Property Group, added: "Extending the stamp duty holiday by three months is simply kicking the can down the road.

"We will have the same cliff edge scenario in three months with buyers desperately rushing to complete sales, but facing delays due to conveyancing issues.

"Conveyancers are already struggling to work their way through the growing pile of cases accumulating on their desks.

"Extending the deadline to the end of June will simply add a whole lot more cases to the bottom of the pile, and clog up the system.

"Also, bear in mind that with lockdown restrictions due to be lifted, this will fuel the property market as we come into the traditionally busy Spring period.

"Transactions could go through the roof causing more bottlnecks in the conveyancing process.

"A much better solution would be a tapered end to the stamp duty holiday to allow conveyancers the time to work their way through cases.

"By allowing transactions, where a mortgage offer has been granted before the end of March, to complete at their own pace, the cliff edge scenario could be avoided."

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