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Agents’ delight as stamp duty extension helps another 300,000 deals - by Graham Norwood

Agents’ delight as stamp duty extension helps another 300,000 deals - by Graham Norwood

Much of the agency industry has reacted with delight at the extension of the stamp duty holiday deadline until June.

Rightmove estimates an additional 300,000 property transactions in
England could benefit from the extension to the tax saving, based on
previous HMRC data. If the additional 300,000 transactions made it
through, buyers could save £1.75 billion in total.

The portal adds that based on the current sales that have been agreed in England, 80 per cent would pay no stamp duty.

There are an
estimated 628,000 sales in total still currently in the legal process
across Great Britain, including those that were agreed last year and
those that have been agreed so far this year. Currently, Rightmove
estimates that 100,000 buyers who agreed a purchase last year are set to
lose out, if the deadline stays as March 31.

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Lucian Cook, Savills’ head of residential research,
comments: “Coming at a time when demand is outstripping supply,
extending the holiday until the mid-year point may also bring more stock
to the market and allow the spring sales market to function more
normally.

“It also reduces the risk of a sharp lull in activity at a time when
the furlough scheme is currently due to end and will help carry the
market through the period of peak economic uncertainty. By the end of
June the economy will be beginning to reopen and those active in the
market will have greater confidence in their future finances.

“Memories of lockdown will still be fresh in people’s minds
underpinning demand from those planning a move for more space or for
lifestyle reasons, particularly given the availability of mortgage terms
at still record low rates.”

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Dominic Agace, chief executive of franchise network Winkworth,
says: "This is great news, as it helps all those who, through no fault
of their own, were set to face unexpected costs arising from a deadline
set two lockdowns ago.

“This will ensure the property market maintains its positive
influence in the economy in the tricky next few months as we start a
sustained covid recovery. I do hope that longer term stamp duty reform
isn’t forgotten.

“Ultimately, the property market needs longer term reform as well, to
ensure it is a healthy functioning market, allowing people to achieve
their aspirations and supporting the economy in the long term.”

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Iain McKenzie, chief executive of The Guild of Property Professionals, says
this is “Great news. Hundreds of thousands of transactions have been
caught up in the logjam caused by the rapidly approaching deadline and
many people face being penalised through no fault of their own.

“While it would be positive to see an extension, an abrupt end to the
stamp duty holiday, whenever it happens, could cause harm to the
economy and disrupt the property market. A gradual phasing out of the
scheme would ensure that consumers still waiting to complete aren’t hit
in the wallet and would make more sense, as a cliff-edge at any time is
an unnecessary threat.

“Considering property transactions are taking longer to complete, if
there is no gradual phasing introduced, buyers entering the market now
will need to be prepared to pay stamp duty.”

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Patrick Littlemore, chief executive at Marsh & Parsons
- the London agency chain owned by LSL - comments: “The Stamp Duty
Holiday has been a positive in the pandemic climate. An extension of it
is most welcome, especially for all parties currently working towards an
exchange of contracts.

“The availability of property in London and the current lending
climate, makes this point in 2021 a fantastic opportunity to move home –
the extension only reinforces that. It will no doubt boost activity in
the spring market.

“This in combination with the Prime Minister’s plans to ease
lockdown, especially the physical return to schools, should have a
positive impact on the family house market in particular.”

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David Alexander, joint chief executive of property management platform Apropos and
a prominent Scottish agent, adds: “There is now a requirement for the
Scottish Government to match the expected announcement by Rishi Sunak in
next week’s Budget. If the finance minister Kate Forbes fails to match
the stamp duty holiday there will clearly be a negative impact on the
Scottish housing sector.”

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Benham and Reeves director Marc von Grundherr comments:
“Thousands of homebuyers across the nation will be breathing a huge
sigh of relief over the announcement to extend the current stamp duty
deadline, having spent months on end waiting to complete with no finish
line in sight.

“That said, those currently working in overdrive to clear the backlog
of transactions at the legal stages may feel differently, with many
more months of long days now on the cards.

“We’ve seen the market pause for breath in recent months as a huge
influx of buyer activity has subsided as the deadline approached. With
this extension, we can expect yet another mad scramble by homebuyers to
secure a saving and while they can continue to expect long delays while
doing so, this will ensure that market sentiment remains high and prices
continue to climb.”

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According to Ben Taylor, chief executive of Keller Williams UK:
“The original stamp duty holiday was on course to save homebuyers as
much as £1.5bn in tax and so this extension will further boost this
figure and ensure that many more benefit as a result.

“Despite the wider economic backdrop, hunger for homeownership
remains high and this latest news will further wet the appetite of
homebuyers and help keep the market stable until such time that
normality has fully returned.”

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Mark Hayward, chief policy advisor at Propertymark, states: “Speculation that the stamp duty holiday will be extended is good news for the property sector.

“Since the holiday was first announced, we have continually worked to
galvanise the industry and lobby government to rethink these timings
due to our concerns that a cliff edge in March could cause thousands of
sales to fall at the final hurdle and have a knock on and drastic effect
on the housing market which has recovered well from the Covid-19
slump.”

However, he insists that any extension should not produce just
another cliff-edge at a later date, but should be phased out or, to use
the favoured term, ‘tapered’.

Hayward continues: “We know from our own research that the majority
of estate agents expect to see an increase in the number of failed sales
if the stamp duty holiday ends at a cliff edge so we need government to
consider a tapered end to the holiday so that buyers aren’t forced to
pull out at the last minute and the property market can continue to
thrive.”

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That concern is uppermost for David Westgate, group chief executive of Andrews Property Group, who says: "Extending the stamp duty holiday by three months is simply kicking the can down the road.

"We will have the same cliff edge scenario in three months with
buyers desperately rushing to complete sales, but facing delays due to
conveyancing issues.

"Conveyancers are already struggling to work their way through the
growing pile of cases accumulating on their desks. Extending the
deadline to the end of June will simply add a whole lot more cases to
the bottom of the pile, and clog up the system.

"Also, bear in mind that with lockdown restrictions due to be lifted,
this will fuel the property market as we come into the traditionally
busy Spring period. Transactions could go through the roof causing more
bottlnecks in the conveyancing process.

"A much better solution would be a tapered end to the stamp duty
holiday to allow conveyancers the time to work their way through cases.

"By allowing transactions, where a mortgage offer has been granted
before the end of March, to complete at their own pace, the cliff edge
scenario could be avoided.”

by Graham Norwood - Editor of Estate Agent Today, Letting Agent Today and Landlord Today

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