Chancellor Rishi Sunak has been told to avoid a stamp duty holiday cliff-edge next March at any price - because it could be devastating for agents and consumers.
An open letter signed by many key industry figures urges the government to reconsider its hard deadline on both the stamp duty holiday and the Help to Buy scheme, both of which end on March 31.
Signatories include the British Association of Removers, NAEA Propertymark, The Guild of Property Professionals, Purplebricks, the Residential Property Surveyors Association, the Conveyancing Association, Society of Licenced Conveyancers, property consultant Kate Faulkner, the House Buying and Selling Group, conveyancing company Simplify, and Landmark.
They tell Sunak that the deadline is putting the housing market infrastructure under huge pressure with most parts of the process under strain even now, five months ahead of the deadline.
“Operational constraints in all areas of the home buying industry caused by the disruption brought about by Covid-19 and the current advice to work at home where possible, have seen average property transaction times lengthen from 12 weeks to 20 weeks” the letter says.
“We are concerned that consumers continue to offer on properties expecting to benefit from the SDLT rate reduction but in reality they may be too late.”
The letter calls for a six-month extension of the stamp duty holiday to next September and for measures to be introduced that would taper the end of the holiday rather than let it run to a so-called ‘cliff edge’.
In a separate statement, NAEA Propertymark chief executive Mark Hayward - one of the signatures of the Sunak letter - says: “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 boom, caused by the stamp duty holiday, has been hugely beneficial for the housing market; however, the stamp duty cliff edge on March 31 could cause thousands of sales to fall at the final hurdle and have a knock on and drastic effect on the 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.”
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Nobody could have written a business plan that accounted for the COVID pandemic or the artificially high numbers of transactions now resulting from the Governments unexpected actions to prop up the UK housing market. This is, however, quite a predictable industry response to the end of the SDLT holiday but banking on the extension shouldn't be part of an agents business plan moving forward. Please urge your vendors to order Search Packs when they put their properties on the market, transfer them to the buyer (when found) and be weeks if not months ahead of the lengthening queues - completions by 31st of March are still very possible - but not leaving it all to chance and hoping for the best.
This was the usual knee-jerk reaction with the predictable side effect, panic buying now at the expense of the end of the benefit. He should have just made a permanent cut.
I think if he made a permanent cut he would not be able to afford all of the Furlough costs and bailing out of firms in financial difficulty. It needs to come to an end as it was only a relief period to kick start the market and economy. Agents pipelines are full and they should all be looking at the ways in which they can help get sales through, not spend time arguing for an extension as that will only set another deadline for everyone to panic over.
An extension of 6 months wont alleviate the pressure, it will simply create another tranche of sales in the Spring who then won't make the new deadline for the same reasons, there will always be a cliff edge. No doubt we would then see a copy and paste in another letter wanting another 6 months.
Most sensible solution is to taper its end from March to June as they did in reverse with the introduction of Section 24. That should cover all transactions currently agreed, and anyone agreeing a to buy a property from now on should be given the health warning that there is a possibility they may not complete before 30th June. Anything that is currently agreed that needs more than another 8 months has got far greater challenges to worry about than stamp duty.
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