The Government is expected to extend the stamp duty holiday for another three months in order to boost the property market following the announcement of the roadmap to ease lockdown restrictions in Britain.
The news will be welcomed by many who were concerned about missing the 31 March deadline.
We understand that Rishi Sunak, Chancellor of the Exchequer, will make the announcement in the budget on 3 March 2021, although details of the extension are yet to be confirmed.
The SDLT holiday was designed to be a temporary relief to stimulate the market and support jobs following the COVID-19 pandemic and subsequent lockdown.
It is understood that property transactions fell by around 50% during the first national lockdown.
The tax relief increased the starting threshold of residential SDLT from £125,000 to £500,000 from the 8 July 2020 until 31 March 2021. Since the relief was introduced, transactions have significantly increased and seasonally adjusted data showed that in October 2020, transactions were 8% higher than October 2019.
The market has been very busy, and the boom has led to substantial increases in average house prices over the last seven to eight months which show little sign of abating. The SDLT threshold extension undoubtedly contributed to this increase. There has been considerable concern within the property market that the abrupt end of the tax break could bring significant disruption. The cliff edge and bottleneck could have seen thousands of transactions collapse, leaving many out of pocket and a sudden fall in property values.
Thousands of people signed a petition to extend the SDLT holiday, which resulted in the issue being debated in parliament and many estate agents, solicitors, surveyors and regulators have also lobbied the Government to extend the deadline.
A temporary solution?
It has been suggested by many professionals within the industry that the most sensible and balanced approach would be to continue the threshold extension and taper it out over a period of six months to a year to ensure there is no sudden collapse and that we don’t simply move the same issue further down the road, only to face it again in the coming months. In this way, we could ensure some continuity and stability in the property market at a time when many may feel that there is very little certainty in employment, finances, or the wider economy.
It is hoped that the extension takes into consideration the challenges the industry has faced amid greater demand from buyers and the lockdown.
If you need further advice please contact Charlotte Robins, Licensed Conveyancer
01823 625863 charlotte.robins@porterdodson.co.uk in Taunton or Jenny Cottrell in Sturminster Newton 01258 444682 jenny.cottrell@porterdodson.co.uk
