The stamp duty holiday announced in 2020 was due to end on March 31st 2021. As the days flew by, and the deadline started approaching at pace, estate agents all over the country were under increasing pressure to get sales completed and over the line. As reports indicate an extension to the scheme, we’ll discuss the current situation and what the future holds for agents, buyers and sellers.
In 2020, the Chancellor, Rishi Sunak, confirmed a temporary stamp duty holiday would be introduced to support the economy, boost the housing market and make it more affordable for buyers to move during the pandemic. Initially, the window was due to close on March 31st 2021, but it has been confirmed that the deadline will now be extended. The stamp duty holiday eliminates stamp duty fees on properties sold for under £500,000 in England. The announcement triggered a surge in interest in properties, with buyers keen to take advantage of the opportunity to save. In the three months that followed the stamp duty holiday announcement, sales increased by 72%, with the average house price in England reaching a record high of £230,920. The temporary holiday enabled buyers to save up to £15,000 on property purchases. The upper limit was set at £500,000 in England and £250,000 in Wales and Scotland.
While there are clear advantages of an increase in sales for estate agencies, the sharp rise has contributed to delays in processing sales and closing deals. Statistics suggest that up to £1.5 billion worth of home sales were at risk of falling through if the March deadline was not extended. Up to one-fifth of transactions could have been affected, with around 100,000 buyers facing unexpected bills.
Following days of intense speculation about the deadline and fervent debate about the potential impact of extending the stamp duty holiday to enable those who are currently waiting for a sale to go through to benefit, reports indicate that a new deadline has now been set for the end of June 2021. It is thought that the Chancellor is likely to give buyers and estate agents more time, but whether it will be sufficient to cover all deals remains to be seen. Some agents and conveyancers have already expressed concerns about a short extension, which may still leave some buyers out of pocket and some sellers facing the risk of deals falling through. The situation is fluid, and agencies and buyers across the country will be waiting for further news and more information from the Chancellor with bated breath.
As well as impacting workloads for estate agents and buyers and sellers who are currently in a chain, the impending deadline has also had an effect on house prices. After a surge in transactions in 2020, house prices fell for the first time in over 6 months in January 2021.
The stamp duty rush is causing widespread problems for estate agents, with up to £1.5 billion worth of sales hanging in the balance. The deadline was originally set for March 31st, but estate agents and their clients are keeping a close eye on the headlines after it was revealed that the holiday will now stretch until the end of June.
