According to The Telegraph, the Chancellor is considering an extension of the stamp duty holiday by six weeks to enable large numbers of people from being caught out by not completing their property purchases before the deadline strikes.
Paresh Raja, CEO of Market Financial Solutions, comments for IFA Magazine on why he thinks this move would make sense.
“After mounting pressure, it looks as though Chancellor Rishi Sunak could be considering an extension of the Stamp Duty holiday beyond 31st March. From my perspective, this move makes sense. The holiday has been fundamental to the recent spike in activity across the residential property markets. Prospective buyers have been to take advantage of the holiday and enjoy savings of up to £15,000. In turn, this has been driving the rate of house price growth to levels not seen since the EU referendum took place in June 2016.
“Interestingly, the latest house price indices from Halifax and Nationwide show that the rate of annual house price growth dropped slightly in January 2021. In my mind, this is not due to prospective buyers being dissuaded from new real estate opportunities. Instead, buyers feel they will not be in a position to complete on a transaction before the current Stamp Duty deadline as it stands. Part of this delay stems from the practical complications of having finance in place to complete on a transaction. The majority of mainstream lenders are not in position to deploy finance quickly, particularly when faced with a complicated case.
“At the moment, it is being reported the extension might last for six weeks, with a final deadline of mid-May. While this would be positive, I fear mainstream lenders would still not be able to arrange a potential surge in enquiries during this short timeframe. That’s why I would like to see an extension that goes beyond this date if announced by the Chancellor in the Spring Budget.”