A prominent conveyancer has hit out at the extension to the stamp duty holiday, which is now ending in late June and not on March 30.
“The latest estimates are that 70,000 to 100,000 home buyers will miss the March 31 deadline … This is obviously terrible news for those affected, but extending the holiday would simply mean delaying the pain to a different set of house movers in the future” warns Simon Nosworthy, a conveyancer at the firm Osbornes Law.
He continues: “Yes, a delay now would save all of those would-be house movers the stamp duty fee, but all that does is store up the problem for other people down the line.”
Nosworthy says that the holiday has so far meant that conveyancers like himself, and much of the agency industry, have never been busier - but he suggests you can have too much of a good thing.
“While this has undoubted boosted business and the economy generally, unless the Chancellor decides to abolish stamp duty forever – around as likely as the abolishment of income tax – then the holiday can’t go on indefinitely.”
He adds: “One major problem with the stamp duty holiday is that it has created an artificial bubble that has seen house prices rise by 8.5 per cent. This means that first time buyers have had to save more to come up with a deposit, when things were already difficult enough to get on the property ladder.
“In addition, there is a real risk that prices, having been artificially inflated, may well go down when the holiday ends. Those who bought during this period may find they have overpaid, potentially negating any saving they made from not paying stamp duty.”
Nosworthy says that some of those who would have been hit by failing to meet the March 31 deadline will obviously benefit from an extension, while more broadly the extension of the holiday increases the galvanising effect on the wider economy.
But he adds: “The stamp duty holiday has served its purpose well in that it has encouraged people into the housing market despite the uncertainty the pandemic has brought. But while there are clear benefits to extending the holiday the time has probably come to let it end and get back to a state of relative normality.”
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And he's right.
No more questions your honour.
Terrible idea to extend it, conveyancing is already horrific and taking 5 months to get from sale to completion.
The market, it could be argued, has been distorted because of SDLT. There’s an argument that reform of SDLT is well overdue. Whilst the Government earning money from private transactions is another debate entirely is it not clear that the rates and bands of SDLT have choked the market? Did the “holiday” not prove that?
During this time of a holiday on SDLT for home buyers I wonder what VAT receipts the Treasury has gained from all the associated expenditure of moving house?
Rishi Rich just loves giving away money, so long as it's not his own!!
The SDLT was a dubious 'giveaway' of taxpayers money to start with, but to extend it seems ridiculous in the face of unprecedented house price growth against a gloomy economic backdrop. Further creating the potential for a sharp correction in house prices...
Absolutely right....“One major problem with the stamp duty holiday is that it has created an artificial bubble that has seen house prices rise by 8.5 per cent." This is the major problem, its created a false market and in addition the surge has encouraged other buyers to join the masses for fear of not being able to afford to buy. The SDLT holiday should end on the 31st March and that should be the end of it, the market will slow immediately after the holiday, prices will level off and are likely to start to fall and everyone who has purchased in the last 12 months will be in negative equity and may find themselves struggling to refinance in the next few years, especially those on 2 year fixed rates. In addition the cost of this holiday will be increase taxes, GCT, Corp tax etc so no benefit to anyone in the long term.
I agree
This along with the help to buy scheme are distorting the true market
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