Yes, for everyone involved in the property industry, good news came through this week that the Chancellor has agreed to extend the Stamp Duty Holiday by a further 3 months.
Find out more about the decision, how it’s being received, and how slashing the Stamp Duty has made a difference to property transactions.
Confirmation in the budget
The reports in the media this week suggest that the chancellor will use the forthcoming budget to confirm an extension of the stamp duty holiday for properties under £500k. The extended period of time will be for three months, which gives people until the end of June to complete on their property sales and take advantage of the extra savings.
Since the stamp duty holiday was announced in July last year, property transactions sky-rocketed, placing huge pressure on legal and conveyancing teams. Reports suggest there is a real risk that if the existing deadline of 31 March 2021 isn’t extended, then thousands of property sales might collapse. Most certainly, many thousands would face missing out on the extra savings.
How is the extension being received?
There has been a lot of pressure in recent weeks for the government to extend the temporary stamp duty holiday in some capacity. Looking at it from a housebuilder’s perspective, the move to scrap the stamp duty on properties below £500,000 has really helped the construction industry. It has provided confidence and stimulus for continued building throughout the pandemic. Who knows what the status of the industry would have been without such an initiative? And with news of the extension, there is scope for even more new home transactions to complete, over and above those already going through the sales process.
A gradual phasing out preferred
What is being called for however as we move forward, is a gradual phasing out of the stamp duty holiday extension. The report has been welcomed by Iain McKenzie, Chief Executive of the Guild of Property Professionals, but he has called for a way out the extension gradually. He said, “While it would be positive to see an extension, an abrupt end to the stamp duty holiday, whenever it happens, could cause harm to the economy and disrupt the property market.” Instead, he hopes to see a gradual phasing out of the scheme so that anyone still waiting to complete is not left footing costs they haven’t budgeted for.
The impact on the property market
The government shared some figures this week, to highlight the residential property transactions for January. They revealed that transactions for the month of January were at their highest figure for 13 years. This all comes off the back of increased activity which has been led by the pandemic itself, and people rethinking their living situations. With remote working being the new normal for many, and less need for commuting, people have ditched city living in favour of a move to a more rural location. Likewise, a property with more space has become something people seek to achieve as lockdown life proves difficult in smaller buildings. Then the stamp duty holiday helped to propel property sales further, enabling those to make their chosen move to favoured locations.
With all that in mind and the market rebounding, figures from the ONS showed house prices rose 8.5% last year. However, the start of this year saw sales tail off slightly – which was to be expected with another strict lockdown in place, and of course, the expectation of the end of the stamp duty holiday. Until now…
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