One of Britain’s most respected agents is suggesting Chancellor Rishi Sunak could ‘taper’ the stamp duty holiday to avoid a cliff-edge when it ends next March.
Jeremy Leaf, the former RICS residential chairman who also runs his own agency in north London, suggests a further option for Sunak is to restrict the holiday to first time buyers only after March.
He makes his suggestions as speculation grows over possibly tens of thousands of transactions now underway failing to complete by March 31 - meaning those buyers will lose out on up to £15,000 saved through the holiday.
“The loss of so many transactions caused by the ending of the stamp duty holiday could have a devastating effect, not just on the property market but the wider economy” explains Leaf.
‘Housing market sales have an enormous multiplier effect by supporting bricks, plumbers, electricians, roofers, decorators, gardeners, and so many other trades - to say nothing of the contribution to job and social mobility.
‘One would hope the government’s aim is to generate more housing transactions at affordable prices but only the unforeseen consequences of the second Covid-19 wave and lenders in particular being overwhelmed by the strength of the demand has prompted these delays” he adds.
Leaf has opened a debate on options for the Chancellor, who as it stands is to close the stamp duty holiday in its entirety in five months’ time.
“The Chancellor could extend or taper the scheme to avoid a ‘cliff edge’ or perhaps more constructively leave the concession in place just for first-time buyers who are the lifeblood of the housing market. Either way, doing nothing is not an option” he says.
The fate of the stamp duty holiday has become a hot topic, and Zoopla has produced a timeline showing the challenge to buyers right now.
The portal says that even in normal years - without the glut of transactions now underway, and with conveyancers, lenders and local councils working at full strength - not all sales agreed in November and December would complete by March 31 anyway.
And in a stark warning the portal’s research team says: “Those [buyers] hoping to enter the market early next year to beat the stamp duty deadline should be aware that just a quarter of sales will complete by 31 March in a normal year. For those keen to beat the stamp duty deadline in March, a sale should be agreed before Christmas.”