‘The stamp duty cliff edge has been smoothed into a runway’

RISHI SUNAK had more good news for the housing market last week — he is now extending the stamp duty holiday scheme previously due to finish on March 31.

At present, anyone who buys a new property pays no stamp duty on the first £500,000, a possible saving of £15,000. The policy has catalysed the market to such an extent that it has been taking more than 17 weeks to complete on a property purchase, with huge backlogs and an estimated 160,000 transactions stuck in the system. Before the Budget there were fears that a ‘cliff edge’ when the policy ran out would mean that thousands of housing market chains would be broken and purchases would fail.

The new policy not only reassures those with slow transactions that they will be able to take advantage of the saving, but also incentivises those who have not yet started to look for a new property.

The deadline for the end of the holiday is now June 30, while buyers will not pay stamp duty on the first £250,000 of their purchase until September 30.

‘The Chancellor hasn’t just smoothed the cliff edge. He’s flattened it into a runway. And the resurgent property market is cleared for take-off,’ says Jonathan Hopper, CEO of buying agents Garrington Property Finders.

‘The announcement will soothe frayed nerves and convince more of the thousands of people who’ve already decided they want more from their home that now is the time to move.’

The move is not just incentivising residential buyers. Law firm Wilsons says it is popular with buy-to-let landlords, too. In the fourth quarter of 2020, 61,800 buy-to-let properties were purchased, the highest quarterly figure since 2017.

‘The extension to properties valued at £250,000 or less, which will be introduced in July and run to September 30, could see more sustained growth in buy-to-let investments. Landlords are also hoping that the end of the latest lockdown will see young professionals, many of whom have spent much of the crisis staying at their parents’ homes, return to renting in city centres.’