The home moving industry has collectively written to the chancellor Rishi Sunak calling for an extension to the stamp duty holiday for at least six months.
In addition, the letter urges the government to work with the industry to ensure a smooth end to an extended stamp duty holiday to prevent another cliff edge.
Properties under £500,000 are exempt from stamp duty until 31 March 2021 as a result of the home moving market being disrupted during the coronavirus lockdown.
Once lockdown was lifted the housing market came back to life and was boosted even more by the announcement in July of the stamp duty holiday exemption. The Help to Buy scheme in its current form also ends on 31 March 2021. Combining all these factors has led to a rise in housing transactions and concern that the industry does not have enough capacity to cope with the demand with completions being concentrated into a “limited window”.
Home movers will want to complete housing transactions by 31 March in order to not pay stamp duty. But the worry is that if transactions fail, it could result in the breakdown of chains if buyers can’t afford to pay the stamp duty.
The letter states that the current advice to work at home where possible, means average property transaction times have increased from 12 weeks to 20 weeks.
NAEA Propertymark chief executive Mark Hayward comments: “The group endorsing this letter represents the breadth of the home moving process including estate agents, search agents, mortgage intermediaries, conveyancing, surveying, energy assessors and removal companies.
“The boom, caused by the stamp duty holiday, has been hugely beneficial for the housing market; however, the stamp duty cliff edge on 31 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 slump.
“We are calling on government to rethink these timings, so pressure on the system can be released to allow transactions to complete and avoid a disorderly and distressing period for movers and businesses throughout the market.”
The letter comes from a number of major housing market participants, including AMI, NAEA Propertymark, Home Buying and Selling Group and MAB.