Stamp duty extension ‘simply defers’ the cliff-edge as calls grow for big changes
Article origin: Marc da Silva, https://propertyindustryeye.com/
The chancellor’s decision to extend the stamp duty holiday beyond the end of this month has been welcomed by most homebuyers and estate agents.
A phased end to the stamp duty holiday will turn “generation rent” into “generation buy”, Rishi Sunak claimed yesterday.
He acknowledged that many purchases would not complete before the original deadline of 31 March due to delays in the homebuying process.
Responding to calls from the industry for a tapered extension to prevent buyers facing unexpected bills, he said that the threshold for the tax to start would remain at £500,000 in England and Northern Ireland until 30 June.
After that, it will be reduced to £250,000 until 30 September, before returning to its original level of £125,000.
Mark Hayward, chief policy adviser at Propertymark, was among those that welcomed the change and called on Scotland and Wales to follow suit.
He said: “The extension of the stamp duty holiday to the end of June followed by the transition to the end of September is much needed to help prevent sales falling through as the initial deadline approaches.
“We urge the governments in Scotland and Wales to follow the UK government’s lead on this.”
Yesterday’s stamp duty extension is not just welcome news for thousands of homebuyers-in-waiting and agents, but also provides “a tonic” for thousands of conveyancers, according to Andy Sommerville, director of Search Acumen.
“Conveyancers have been under pressure to complete due diligence on an industrial scale against a pressing deadline, and risking burnout at a time when businesses are still under government instructions to work from home,” he said.
But he also warns that extending the stamp duty deadline is delaying the inevitable cliff edge.
He continued: “The chancellor’s much-anticipated move simply defers rather than dodges the cliff-edge by putting it off until June.
“The stamp duty holiday has once again shown the flaws in traditional working practices and flagged the need to future-proof the property market with a data-driven approach to drive transactions through to completion.
“Given the technology at our fingertips, no homebuyer in 2021 should have to wait for weeks at the back of a queue for due diligence to be completed. Neither should any conveyancer have to apologise to their clients for delays caused by a system clearly past its sell-by date.”
While it is positive to see the government listen to the views of agents and conveyancers on the coalface, as well as the property-buying public, more consideration should have been paid to calls for a more specific tapered end to the tax cut, according to Bryan Mansell, co-founder at Gazeal.
Mansell commented: “A three-month extension – and additional help until September – will be more effective than an additional six weeks, which was previously rumoured to be in the chancellor’s plans. However, it still creates a cliff-edge so even though more buyers will benefit from stamp duty savings than previously thought, there will still be some who miss out.”
He added: “As accentuated by the stamp duty holiday rush, the current homemoving process is broken and struggles to cope with a high number of transactions.”