Agents and conveyancers are expressing doubt over whether a possible six week extension to the stamp duty holiday will be enough to stop fall throughs.
A government source floated the six week idea in the Daily Telegraph over the weekend – as reported on Estate Agent Today on Saturday – with a suggestion that the new cliff edge would be in mid-May instead of March 31.
However, this provoked an immediate response from Rob Hailstone, founder and managing director of the Bold Legal Group.
“It makes no sense to just extend the SDLT holiday. Another batch of would-be purchasers will simply miss the next deadline. Surely, the government either has to be creative or leave well alone at this late stage?” he commented.
“It is like saying – good news Mr Hailstone your lethal execution date has been out off six weeks. Still going to happen, still going to be just as scary and just as final. Just prolongs the agony” he continued.
And ESTAS awards founder Simon Brown wrote: “Would it not be more sensible to just extend it for those already in a transaction? Otherwise it will just extend the stress period for agents and especially conveyancers.”
The prospect of an extension that takes in some – but not all – of those buyers currently in a transaction comes as Rightmove estimates some 100,000 buyers who agreed a purchase before Christmas will fail to complete by March 31.
And the portal estimates that one in five of the buyers who agreed a purchase right back in July – seven months ago, when the stamp duty holiday was announced – will still fail to make the current March 31 cliff edge.
This is double the proportion of the previous year when only one in 10 purchases agreed in July 2019 were still waiting to complete at this time last year.
The portal says in a report out this morning: “Even if you agreed a purchase the day after the stamp duty holiday was announced, with just six weeks to go, you may still be at risk of losing out by not having enough time to meet the deadline.”
Buyer demand was ahead of the same period in 2020 throughout last month and is even stronger in all key metrics for the first week in February compared to a year ago.
Rightmove says: “Despite the very minimal chance of benefitting from the stamp duty savings, the number of purchases agreed is currently up by seven per cent. The pipeline for future sales is looking even stronger, with the number of prospective buyers sending enquiries to estate agents up by 18 per cent, and the number of visits to Rightmove up by 45 per cent. This high buyer demand is outstripping new supply and helping to edge up prices despite the challenging economic backdrop.”
Meanwhile asking prices are rising again after three successive months of falls according to Rightmove.
The average price of property coming to market has risen in the past month by 0.5 per cent – the equivalent of £1,522 – fuelled by a shortage of supply with fewer new sellers coming to market, and increased demand.
The portal says this particular surge is clearly not turbocharged by the stamp duty holiday, as it is clearly too late for new deals to meet the March 31 deadline.
Tim Bannister, the portal’s director of property data, adds: “Last year the market was unexpectedly buoyed by buyers’ determination to move and satisfy their new lockdown-induced housing needs. We may well be seeing a continuation of that this year.
“Rightmove’s early 2021 buyer data shows that despite the imminent end of the stamp duty incentive, all of the key buyer metrics are ahead of early 2020, itself an active period as the market was boosted by the post-election ‘Boris bounce’.
“As well as the current lockdown motivating buyer demand again, the restrictions have also been a factor in limiting new supply, leading to some modest upwards price pressure.
“These are strong signs that new buyer demand is not facing a cliff-edge after March 31. It remains to be seen if this momentum will be enough to make up for the removal of the stamp duty savings that are benefitting many buyers and have been adding a sense of urgency to the whole market.”
