I think it’s quite likely there may be a short extension – a few weeks – to the stamp duty holiday, to help those who have agreed a purchase this year with the reasonable expectation of completing before the end of March, but who aren’t able to because of the lack of capacity in conveyancers, mortgage lenders, local authorities and so on.
If this does happen, I don’t think it will be announced until it’s too late for it to lead to new purchases being agreed; so not before February at the earliest.
It therefore shouldn’t have any particular effect on the market in Q1, except for preventing some purchases from falling through as a result of missing the deadline.
Where completions do miss the deadline, even if it’s extended, the reactions will be varied.
Grin and bear it
Some buyers will grin and bear it, some will expect the vendor to share the pain (especially if they feel that the vendor or their conveyancer is responsible for missing the deadline) and a few will be unable to reach agreement and fall through.
There will certainly be a slowdown in the number of sales completing in Q2, which means a slowdown in the number of sales being agreed in Q1, probably starting quite early after a flurry of last-minute (or perhaps just-too-late) deals are agreed in the first couple of weeks of January.
But I expect market activity to recover quite quickly, as it has done after previous stamp duty deadlines, and think that completions for the second half of the year should be largely unaffected.
Mike Scott is hybrid agency Yopa’s Chief Analyst. Before joining Yopa he worked at Rightmove for nine years.