What will a stamp duty holiday extension mean for the property market?

Rishi Sunak looks set to announce an extension to the stamp duty holiday.

The Times has reported that the Chancellor is keen to give the housing market a further three-month run of transactions free from stamp duty. 

Giving the wider economy a boost

The aim is to give the overall economy a much-needed additional shot in the arm. It could save buyers up to £1bn along the way.

The case for an extension has been building, given the longer time it’s taking to complete a sale after a sale has been agreed. 

Legal and mortgage work has been delayed because there is so much activity, as have council searches.

This extension means that buyers who purchased last year who were likely to miss out will be guaranteed the saving. Additionally, many of those who have agreed a sale so far this year will also benefit. 

The Treasury is also taking into account concerns that the economy will wobble as England comes out of lockdown. A strong property market will be a big help in this sense.

Will the stamp duty holiday extension boost the wider economy?

Research by Zoopla before the new year pointed to several hundred thousand home-movers missing out if the cut-off ‘cliff face’ was kept to its original 31 March 2021 deadline.

Many sales from early 2021 would miss out on stamp duty savings if the holiday wasn't extended

Moving this to 30 June 2021 would give time for conveyancers, agents, vendors and buyers to catch up. It would also align the housing market with Boris Johnson’s roadmap announcement earlier this week, with a target of a full return to normality by 21 June.

The claims that Sunak has relented on the stamp duty deadline are proof that the government has been listening to pleas from almost all sectors of the property industry. Many have been calling for an extension, including many major estate agency names.

What will the extension mean for the conveyancing backlog?

Conveyancers, surveyors and lenders have also supported calls for an extension. All of these sectors have been warning for several months that a 31 March cliff-face would leave hundreds of thousands of home buyers out of pocket.

Alongside the wider buyer ‘search for space’ since the start of the pandemic, a significant proportion of recent sales will have been initiated due to the stamp duty savings on offer. 

Consumer and industry lobbying came to a head last month. A parliamentary e-petition, which has now garnered over 150,000 signatures, triggered an online debate by MPs and grilling of Treasury chief Jesse Norman.

The view of estate agents

Patrick Littlemore, Chief Executive at Marsh & Parsons, said: “The stamp duty holiday has been a positive in the pandemic climate.

“An extension of it is most welcome, especially for all parties currently working towards an exchange of contracts. 

“The availability of property in London and the current lending climate, makes this point in 2021 a fantastic opportunity to move home – the extension only reinforces that. 

“It will no doubt boost activity in the spring market,” he added.

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