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Change course on stamp duty holiday, industry urges Rishi

Senior figures say stamp duty holiday cut-off on 31st March is too soon if property market is to survive the looming downturn as the second wave of Covid sweeps the nation.

Nigel Lewis

rishi sunak stamp duty

Leading industry figures have warned the Chancellor that his stamp duty holiday should be modified or extended to prevent serious problems as hundreds of thousands rush to complete by the 31st March cut-off.

The calls have been made after housing minister Christopher Pincher dismissed calls from opposition MPs to extend the scheme.

He told Labour shadow justice minister Peter Kyle that: “The temporary increase in the Stamp Duty Land Tax nil rate band was designed to provide an immediate stimulus to the property market, where property transactions fell during the COVID-19 lockdown.

“The Government does not plan to extend this relief and will continue to monitor the property market.”

The announcement was unusual as Pincher is with the Ministry of Housing, Communities and Local Government and not HM Treasury.

Devastating

Jeremy LeafNorth London agent and former RICS residential chairman Jeremy Leaf (left) says the loss of so many transactions caused by the ending of the stamp duty holiday could have a devastating effect, not just on the property market but the wider economy.

“Housing market sales have an enormous multiplier effect by supporting bricks, plumbers, electricians, roofers, decorators, gardeners, and so many other trades – to say nothing of the contribution to job and social mobility,” he says.

“The Chancellor could extend or taper the scheme to avoid a ‘cliff edge’ or perhaps more constructively leave the concession in place just for first-time buyers who are the lifeblood of the housing market. Either way, doing nothing is not an option.”

Industry proptech consultant Andrew Stanton says the Chancellor could also consider allowing ‘sales agreed’ transaction to be included in the scheme, helping the hundreds of thousands sales that are unlikely to complete in time to benefit from the scheme.

‘Whenever a chancellor tinkers with stamp duty there is an equal reaction; 1988, boom to bust, 2017, scramble to buy a second home and house inflation, 2020 race to save up to 15K; resulting in house inflation and potentially hundreds of thousands missing the holiday cut off, causing mayhem,” he says.

Read more: Is the property market walking into a stamp duty disaster?

October 28, 2020

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