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By Graham Norwood

Editor, EAT, LAT & LLT

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Stamp duty holiday extension - This horse ain’t dead yet

Just a week ago, I thought it was all over. Christmas and New Year had gone, as had the passionate calls for the stamp duty holiday to be extended.

Those calls had provided me with many stories in the build up to the festive season but surely, by the time January rolled around, it would be difficult for the pleas to continue - if Sunak was going to do it, he’d have done it by now.

But then something changed: Lockdown 3.  And with that, three new reasons emerged as to why the Chancellor may yet extend the March 31 deadline.

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Firstly, more people are working from home - again.

Office for National Statistics data shows that in April 2020, 46.6 per cent of all those in employment did at least some work from home. That reduced significantly over the rest of the year, down to below 30 per cent by December.

But now Lockdown 3 is set to take the working-from-home percentage to over 40 again, with office-based staff (conveyancers and planners for example) first in line for working from home, especially if schools are closed and they have to keep an eye on the kids.

Employment studies suggest that while individual productivity often improves amongst home-workers, so-called chain activities - where one person passes on data to another person as part of the work process - slows down. And that, of course, is why transactions can slow down, making the cliff-edge deadline of the stamp duty holiday a real problem.

Secondly, there’s the question of fairness.

People have quite reasonably done their bit - buying, selling, conveyancing, searching - in the reasonable expectation of meeting the March 31 deadline. But if lockdown leads to them missing the deadline, why should they suddenly be on the wrong side of it?

London agent and former RICS guru Jeremy Leaf got it right, saying: “The new lockdown will have some impact on surveyors, removals firms etc and in the circumstances, it would be prudent for the Chancellor to reconsider the stamp duty deadline. Those who have moved heaven and earth to meet the deadline should not now be penalised if they miss it through no fault of their own.”

So what about a tapered finish to the holiday? Let’s say if anyone has accepted a mortgage offer by March 31, they should be able to complete their purchase and take advantage of the SDLT holiday. That would be fair, without encouraging more and more buyers.

Thirdly, there’s cheerfulness and image.

Does Rishi Sunak - with a carefully cultivated persona of being efficient and a financial saviour during this most unpredictable and worrying of times - want to appear downright mean and unfair to the thousands of buyers whose transactions fall foul of the cliff-edge?

George Franks, another London agent, puts his finger on it: “Extending the stamp duty holiday is a way for the government to give people something to cheer about when there’s so little to cheer about, as public sentiment and the property market are closely related.”

Not everyone will buy that £15,000 off a home costing, say, £450,000 is the definition of cheerfulness. For sure, The Guardian would say it’s the well-off making the well-off feel better. But a simple phased extension would make sure no existing committed buyer misses out - and the result? Happiness, at least in the short-term.

So I’ve changed my mind. I’ve been persuaded that arguing for a stamp duty extension is no longer flogging that dead horse - to mix metaphors, I’d say the idea still has legs.

Here’s one way to push the Chancellor a little more - by signing this petition.

Let’s talk about this again in the next few weeks, and see if Sunak changes his mind, too.

*Editor of Estate Agent Today, Letting Agent Today and Landlord Today, Graham can be found tweeting about all things property at @PropertyJourn

  • icon
    • dkny
    • 09 January 2021 09:15 AM

    Do NOT extend the stamp duty holiday!!! It will only delay the inevitable. Price corrections which is needed for everyone.

  • adrian black

    it's a daft tax and politicians realise that its a daft tax and that something along the lines of a Land Value or usage tax would be much better - the question is whether politically the current government can finesse or facilitate the switch with electorate support

  • Michael Day

    I didn’t think the holiday should have been introduced in first place but it has achieved its objective of stimulating the market but it has to end at some point. Every similar Government intervention in history has created an element of boom and bust. Transactions have, in the main, simply been brought forward and squeezed into an artificially short timeframe.

    The current lockdown will inevitably see reduced levels of new transactions and so gives a greater chance for current pipeline transactions to go through.

    I personally don’t think the Government will extend but if they do it is likely to not be announced until after the February half term review. We are living in fast moving and challenging times.

    Lot of talk of the £15000 “saving” but, nationally, the average sale price is £250,000 and so the average “benefit” of the SDLT “holiday” is significantly lower. Whilst there may be some renegotiations I don’t see the “wholesale” aborting of huge numbers of transactions.

    People basically don’t buy property for short term gains or reasons.

    The feel good factor of defeating the virus will have a far greater impact on the market than any short term stimuli.

  • icon

    Maybe just phase it out, end of march first 500k, end of May first 400k etc

  • Richard Hancock

    Well said Michael!

  • C B
    • C B
    • 10 January 2021 08:46 AM

    My guess is Govt will say as long as you’ve exchanged by end of March you qualify for the SDLT saving.

    Michael Day

    Not impossible but difficult to police as nothing “registered” at exchange of contracts and possibly open to dates being changed on paperwork.

     
  • icon

    There has to be a tailing off not a cliff edge or there will be mayhem in the market - chains breaking, removers double booked, people sold but unable to leave property! Those sales already in progress should be allowed to complete SDLT free - how you draw that line I'm not sure!

  • tim Sample

    It's a great boost for the industry and as they hadn't encountered further lockdowns , why not extend the stamp duty , Furlough has been

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