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Chancellor urged to extend Stamp Duty holiday

POSTED ON 08 JANUARY 2021

New lockdown adds to existing problems processing applications, industry experts insist

 

Property industry experts are urging the Chancellor, Rishi Sunak, to extend the Stamp Duty deadline and prevent anxious homebuyers from “being thrown off a cliff edge”.

In the first national lockdown last year, the Chancellor announced a holiday from the tax to keep the property market moving. This expires on March 31st, but such has been the demand – coupled with logistical issues caused by much of the industry now working from home – that many homebuyers are in limbo hoping their moves are completed in time.

And their hopes have been further hampered by the announcement of a third national lockdown.

David Hannah, the founder and principal consultant of Cornerstone Tax, said: “It is critical that the Government reviews this Stamp Duty holiday, and either announces an extension or amends the tax payment date so that homebuyers can still take advantage of it, even if they cannot complete by March 31st.

“The most preferable option would be a phasing out of the holiday, to avoid those who are currently in the process of purchasing their properties, essentially being thrown off a cliff-edge.

“Especially now that the country is being plunged back into another full lockdown, more must be done to help people get on the property ladder and give the market some security in, what will be, a very turbulent few months.”

Coreco’s managing director, Andrew Montlake, focused on the processing difficulties as more people have been urged to work from home, and said: “Lenders, valuers and conveyancers are already experiencing bottlenecks and delays, given the amount of applications going through, and the administrative upheaval caused by the latest lockdown will only serve to accentuate them.

“We would not be surprised if the Treasury makes an announcement about extending the deadline to keep demand alive and give the property industry some much needed wiggle room.”

George Franks, the co-founder of London-based estate agents, Radstock Property, echoed the point: “Transactions are already under a lot of time pressure. Extending the deadline by at least another month seems like the right thing to do in the circumstances, and I’m sure it’s on Rishi Sunak’s agenda.

“The property market is providing vital fuel for the economy and the Treasury will want to ensure that continues.”

And Karen Noye, a mortgage expert at Quilter, said: “Recent figures from the Bank of England show that mortgage approvals rose to their highest level in 13 years, with net borrowing hitting £5.7 billion in November. It is clear the housing market has been burning bright thanks to the fuel of the Stamp Duty cut, but the blaze will likely be extinguished without any further Government support.”

However, she added: “The Stamp Duty cut is an imperfect solution. There are valid concerns it has inflated property prices and has done little to help, and has even hindered, first-time buyers. But it should be seen as a sticking plaster to patch up the market through the difficult first half of the year before the economic recovery can begin.”

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