On The Fence! - MPs stay neutral over stamp duty holiday extension

MPs lobbied by agents to extend the stamp duty holiday are staying firmly on the fence with standard answers and no suggestion - at least yet - that they will help our industry. 

Over recent months most agency industry groups have suggested to their members that they lobby their MPs on the SDLT issue, putting forward arguments that many consumers risk not being able to enjoy the holiday because the rush of transactions means major backlogs with agents, conveyancers, search bodies and surveyors.

The Guild of Property Professionals set out a model letter for its members to send to MPs and now Iain McKenzie, the Guild’s chief executive, says many have received written responses.

“However, many of the responses have been a standardised reply that shows support for extending the tax break, but no further details regarding what we could expect leading up to 31 March 2021” explains McKenzie.

Here is the standard response many agents have received:

‘I welcome the temporary cut to Stamp Duty Land Tax for home buyers across England and Northern Ireland until the end of the financial year.

 ‘The Temporary Stamp Duty Land Tax (SDLT) cut will temporarily increase the Nil Rate Band of Residential SDLT, in England and Northern Ireland, from £125,000 to £500,000. This applies from 8 July 2020 until 31 March 2021 and cut the tax due for everyone who would have paid SDLT. According to the Treasury’s Plan for Jobs, nearly nine out of ten people getting on or moving up the property ladder will pay no SDLT at all as a result of this change.

'I welcome this measure as a crucial intervention to ensure medium-term confidence in the property market and maintain the growing momentum since the easing of lockdown.

 ‘I am confident that this action to support the housing market is protecting and creating jobs. In England and Wales, an estimated 240,000 people are directly employed by housebuilders and their contractors, and between 500,000 and 700,000 employees are indirectly supported in the supply chain. Moving to a new house also boosts the economy, with estimates suggesting that doing so drives additional spending worth about 5 per cent of the house value.

 ‘There is strong evidence to suggest that the temporary cut to SDLT is having the desired effect, with a 14.5 per cent rise in residential property transactions in July, followed by a 15.6 per cent rise in August. This is in addition to the 30 per cent increase in construction activity in July.

 ‘I understand concerns regarding the backlog of transactions and the impact this could have on people whose purchases may complete after 31 March and I will alert my ministerial colleagues to the strength of feeling on this matter.’

McKenzie continues: “We are … aware that at this stage the government has not agreed to extend the tax break and have not laid out any plans with to regard to a phased out approach. For the time being, the deadline remains, and many transactions will not make the cut off. We will continue to encourage our mnembers and the industry collectively to have their say and send their letters to their local MPs.”

And he adds: “An extension of the stamp duty holiday would be optimal, however, if the government decides against an extension, at the very least a phasing out period would help lessen the blow to people currently in the process of buying a home.”

Yesterday we reported on an online petition calling for the holiday to be extended. You can see the story here, and there is a link to the petition.