The stamp duty deadline is fast approaching, and those waiting for sales to go through are worried as they face long delays getting everything across the line.
Many people signed a petition, which called for a six-month extension to the deadline. It reached more than 100,000 signatures and was debated virtually by MPs on February 1.
Since then, there have been rumours that Rishi Sunak may extend the stamp duty holiday until the end of June, using his Budget on March 3 to move the tax break, The Times reported.
This comes as almost half (48%) of homebuyers are worried their sale won’t complete before the March 31 deadline, according to a survey of 1,000 people by mortgage broker Enness Global. Meanwhile two thirds (67%) of homebuyers want to see the stamp duty holiday extended.
The government agreed to a stamp duty holiday last summer to help keep the economy buoyant during the pandemic. The move sees the tax rate cut to 0% for all properties priced £500,000 and under – but only for a limited time.
There are 140,000 more people in the process of buying a new home compared to this time last year, according to Zoopla. This is unsurprising, considering people can save up to £15,000 with the temporary waiver.
However as the deadline looms, experts have warned that the harsh cut-off date may cause even more issues for the housing market – and the economy.
It’s thought more than £3.4bn could be lost in fees and commission to estate agents, lawyers and surveyors if people drop out of home purchases because they cannot complete before the stamp duty holiday ends, The Times reported.
A survey by The Guild of Property Professionals revealed almost a third (31%) of people have said it’s likely they’ll withdraw from a purchase if they fail to complete before the stamp duty deadline. Iain McKenzie, the guild’s CEO and a former estate agent, told The Express this “will be a hit to the economy and is something the government must surely address”.
Pressures on the legal system mean the time to exchange has increased, with solicitors working around the clock to help clients reach completion by the deadline. However many are having to notify clients they need to have the funds available to pay stamp duty, if for whatever reason they don’t complete in time.
For some, this means stumping up tens of thousands of pounds extra, on top of deposits and solicitors fees – and all in the middle of a pandemic.
Industry experts have urged the government to extend the deadline or make allowances for those who’ve had offers accepted so they can still benefit from the stamp duty relief without impacting the market.
McKenzie suggested the government should give homes either on the market or under offer as of January 1 2021 a further six months to complete and “effectively phase the stamp duty holiday out”.
Meanwhile Hugh Wade-Jones, managing director of Enness Global Mortgages suggests a fair alternative to an extension would be to allow those who have an offer formally accepted prior to the end of March to qualify for stamp duty relief.
The government is keeping the stamp duty tax under review and is closely monitoring the market, HuffPost UK understands.
When asked whether there will be an extension to the scheme, an HM Treasury spokesperson responded: “The temporary stamp duty cut is helping to protect hundreds of thousands of jobs which rely on the property market by stimulating economic activity.
“Its time limited nature is what has encouraged people to take advantage of the scheme.”