There is speculation that the Chancellor will extend the Stamp Duty Holiday deadline by 6-weeks from the 31st March.

An extension of the ‘holiday’ will not particularly help buyers who have recently agreed a purchase, as most transactions are taking over 12 weeks to complete at the moment. But for many who agreed their purchases towards the end of 2020, any extension to the deadline will be a huge relief.

There are ‘000’s of properties locked into chains where everyone is working hard to complete before the end of March 2021, but for reasons beyond anyone’s control, the completion date may slip a week or two, or three. Such delays have been caused by conveyancing staff being off with Covid-19, surveyors unable to access properties because the seller has been isolating due to Track and Trace or testing positive for Covid-19, delays in Probate being granted, and the list of legitimate reasons goes on.

Missing the 31st March deadline could cost a purchaser from a few £00’s up to £15,000 – the latter a harsh penalty no matter how deep the purchasers pocket or budget!

There are some in our industry who believe the Chancellor isn’t going far enough. They are wanting the ‘holiday’ to be substantially extended (although I note few are giving any suggested new deadlines). The ‘holiday’ was always for a short period. The Chancellor made that clear last summer that it was to boost the housing industry at the time and help people at that moment to move on with their lives, in what was perceived to be the middle of the pandemic. The ‘holiday’ was in fact quite generous in terms of the timescale, and many more people that intended have benefited from the ‘holiday’. It achieved its objective with house moves up 10% in 2020 compared to 2019.

What it also did, which was an unintended consequence, was stimulate demand for property to such an extent that we saw an uplift in property inflation in most areas (London excepted). A further unlimited extension to the ‘holiday’ would only serve to underpin this higher demand and leading to even further property inflation. This does not help first time buyers, who have been the hardest hit financially in this pandemic.

There may be some readjustment of property prices in the market when the Stamp Duty Holiday final comes to an end. This should only have a short-term negative impact on prices after which supply and demand with allow the market to find its new, natural, level. As always, people need to have a roof over their head, and whilst there is finance in the market from lenders, the housing market will progress in its usual, indefatigable, journey ever upwards in the long term.

A blog post by Director Michael Moore FNAEA, MARLA