Landlords are being urged to do everything they can to push through any new buy-to-let purchases before the stamp duty holiday ends next year.
It’s the first time that industry bodies – including estate agents, solicitors and removal firms – have come together to warn about the dangers of the stamp duty holiday coming to an end, and to call for an extension.
In a joint letter to the Chancellor, Rishi Sunak, they claimed that without the extension, house sales could 'fall off a cliff'.
The letter explained: “Failure to complete these transactions could see the breakdown of chains with consumers potentially financially unable to continue with the purchase, as they would have to find funds to pay stamp duty.”
It went on to say: “By acting now the Government can release the pressure in the system to allow transactions to complete and avoid a disorderly and distressing period for movers and businesses throughout the market.”
It suggested that an extension or ‘gradual phasing of stamp duty would also help mitigate sharp reductions in demand’.
The stamp duty holiday was brought in to stimulate the housing market following lockdown.
It’s been effective, with the latest figures from property website Zoopla suggesting that compared to this time last year, 50 per cent more home sales are waiting to be completed.
But this extra work is causing delays in the transactions pipeline, prompting concerns that the typical 100 days to completion can no longer be met.
“Those looking to beat the stamp duty deadline need to agree a sale before mid December,” suggested Zoopla’s research and insight director Richard Donnell.
And Mark Hayward, chief executive of NAEA Propertymark, said: “The joint letter sent to the Chancellor is an important step in protecting those in the process of buying or selling a house that might miss out on the March 31 stamp duty deadline.
“The stamp duty cliff edge on March 31 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.”
Landlords as well as owner occupiers will be affected by the end of the stamp duty holiday.
Simply Business’s own research of 1,385 landlords found that one in 10 property investors are looking to expand their portfolios, up from three per cent before the coronavirus pandemic at the start of the year.
Landlords can’t avoid paying stamp duty altogether, as they must still pay the buy-to-let surcharge of three per cent.
However, they can still make a significant saving due to the removal of the standard rate of tax below £500,000 until the end of March next year.
Do you think the government should extend the stamp duty holiday? Let us know in the comments below.
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10 July 2020 • 2-minute read
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