An estate agency is warning that the likely rush of transactions when the new stamp duty holiday ends next spring will be too big for conveyancers, surveyors and mortgage lenders to cope with.
Mike Scott, chief property analyst at online agency Yopa, says he welcomes the announcement made yesterday that there would be a stamp duty holiday until the end of March for all homes costing £500,000 or less.
But he adds: “When the stamp duty holiday comes to an end at the end of March, the market will be distorted as everyone rushes to complete their purchase in time. Further, there may not be sufficient capacity for conveyancers, estate agents, surveyors or mortgage lenders to cope.”
Scott says he would have preferred to have seen a longer stamp duty reduction phased out gradually rather than hitting a cliff-edge on one specific date.
Better still, he says, would have been for the government to have encouraged mortgage lenders to resume products with 90 per cent loan to value, thus enabling more first time buyers to get on to the property ladder without needing such large deposits.
“Since stamp duty is payable upon completion, and it typically takes three or four months to go from agreeing a property purchase to completing it, many of the buyers who will be helped are already in the process of purchasing; a decision they made months ago and have fiscally accounted for” explains Scott, who says these purchasers “will effectively be getting a free handout from the government.”
Making a similar point is Iain McKenzie, chief executive of the Guild of Property Professionals, who says: “Our advice now is for sellers to instruct a conveyancer at the time of first going to the market, to prepare a sale ready pack. Conveyancers may get inundated with cases and best practice will try to avoid a blockage where possible.”
Yopa and the Guild are not the only parts of the property industry with concerns about the impact of the stamp duty holiday.
Although the move is broadly welcomed by London estate agency Benham and Reeves, its director Marc von Grundherr adds: “This latest move should help keep property values buoyant although it is disappointing to see yet another government initiative that focusses on fuelling demand instead of addressing housing supply.”
Anthony Codling, the former property analyst who is now running the PropTech firm Twindig, warns: “It will be interesting to see if the stamp duty cut leads to a thriving UK housing market and provides the confidence in buying selling moving that we need, I hope I am wrong, but history suggests otherwise. We may be being encouraged to eat out to help out but we are certainly not being encouraged to move out.”
Quick buy company National Property Trade says it was “extremely disappointing” that the scope of the Chancellor’s stamp duty holiday was so limited.
“What about last time buyers? It’s extremely disappointing not to see a … stamp duty exemption for older downsizers who collectively hold the key to unlocking our housing market … It would also have been good to see an exception of the additional three per cent stamp duty levy” says NPT’s chief executive Cormac Henderson.