In a recent cross-party debate, it was discussed that transactions worth billions of pounds were at risk unless the tax cut was extended, with signs that some deals are already starting to fall through.
There has been much talk of “the unnecessary cliff edge” being presented by the March deadline and even those who did act in good time will still lose out because conveyancing delays have swelled to such extremes. The latest Rightmove analysis shows that it is now taking just over four months from the time an offer is accepted until legal completion. Meaning that new buyers in the market should not be factoring in stamp duty savings, unless they are first-time buyers, who will still mainly be exempt after the March deadline has passed. Of those already in the sales agreed pipeline, now at 613,000, Rightmove’s analysis projects that around 100K will miss out on stamp duty savings.
Our favourite property expert, Phil Spencer is warning that “chaos” and “mayhem” looms in the housing market if the stamp duty holiday is not extended. Speaking to Graham Norton on Virgin Radio he said:
“I think chaos would ensue if the stamp duty holiday did end on a specific date, because everybody would be working towards that day. It’s great to keep people motivated towards that day but actually, if they haven’t completed their deals on that date, the chances are that deals will be collapsing left right and centre. It will just be bedlam.”
The stamp duty holiday was introduced by the chancellor, Rishi Sunak, in July in a bid to kick-start the housing market after it was closed for eight weeks during the first national lockdown. It means that no stamp duty needs to be paid on properties costing £500,000 or less until 31 March. For more expensive homes, stamp duty is only paid on the portion above £500,000. This could save home buyers up to £15,000.
The debate was triggered by an online petition which called for the holiday to be extended by six months, and had nearly 140,000 signatures.
Financial secretary to the Treasury, Jesse Norman MP, spoke on behalf of the Government during the debate. He said it was “aware of the strength of feeling on this issue,” but that he was not allowed to comment on tax policy outside of a fiscal event. This, he said, meant he could not say whether or not the Government was considering extending the holiday.
This means that agents, homebuyers, conveyancing solicitors, mortgage lenders, surveyors, and even MPs will have to wait until the chancellor Rishi Sunak’s Budget on 3 March to see if he will announce whether or not the relief will be extended.
Articles and materials from the Petty Real website and newsletter are provided for informational purposes. Petty Real are not responsible for the accuracy, legality or content of any external sources referenced on this website. The information provided is for general information purposes only and you should not reply upon the material or information as a basis for making any business, financial or legal decisions.