Should the stamp duty holiday be extended?
There is no denying the stamp duty holiday has had a significant impact on the housing market. With prospective buyers having the chance to save as much as £15,000 on stamp duty fees, it is no surprise that the market has been so busy.
Also, with a deadline in place, people are encouraged to move sooner rather than later. Add this to buyer concerns that the standard of homes available are likely to drop the closer we move towards the deadline, and it is easy to see why there is so much activity.
A backlog is developing in the housing market
However, this heightened level of activity has created a backlog. With many industries and professionals dealing with COVID regulations, delays are occurring, and there are growing concerns about property deals not being concluded in time.
Gavin Brazg, is the founder of The Advisory, and he was warned that as many as one-third of buyers in England might miss out on the stamp duty saving.
Mr Brazg said; “Because it takes roughly 21 weeks for house sales in hot markets to find a buyer, accept an offer and complete the legal process, only house sellers that are already on the market - or lucky enough to be in an area where houses are likely to sell fast - will be able to secure a buyer and get their deal over the line before the deadline. Everyone else will no doubt face last minute chain collapses as buyers pull out of the deal or try to renegotiate their purchase price downwards.”
There is a consensus help is needed
A number of leading names and bodies in the UK housing market have pulled together to create an open letter, calling for an extension to the stamp duty holiday.
Signatories of the letter include:
• British Association of Removers
• NAEA Propertymark
• The Guild of Property Professionals
• Residential Property Surveyors Association
• Conveyancing Association
• Society of Licenced Conveyancers
• Kate Faulkner
• House Buying and Selling Group
The letter details the significant pressure placed on the housing market because of the holiday, and how the industry is already feeling under the strain as of late October 2020.
The letter reads; “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. 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.”
There are calls for the stamp duty holiday to be extended to September 2021, which represents an extension of six months. There have also been calls for the holiday to feature a tapering off process, which would avoid the “cliff edge” impact that is a concern to some professionals.
If you are interested in our lettings or property management services or you are looking to buy, sell, let or rent property in or around Willesden, call us on 020 8459 2530 and a member of our estate and letting agent team will be happy to help.
You can also view and use our stamp duty calculator here.