Speculation that the stamp duty holiday could be extended until the end of June has been hailed as good news for landlords, although there are fears it could create another cliff edge when it’s finally lifted.
Chancellor Rishi Sunak is reportedly set to extend it by three months, in line with the easing of lockdown restrictions, amid concerns that it would otherwise create a cliff-edge, jeopardising hundreds of thousands of sales.
The Office for Budget Responsibility has forecast that there will be a significant slowing of the housing market if the holiday comes to an end on 31st March and that house prices could drop by more than 8% this year.
However, Mark Hayward (pictured), chief policy advisor at Propertymark, says although he welcomes the news, extending the holiday will create another cliff edge.
He adds: “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.”
Questions also remain over whether the rumoured extension will apply to new buyers or only those caught in the transaction pipeline.
Earlier this month, a LandlordZONE poll revealed that nearly two-thirds of landlords want Chancellor Rishi Sunak to extend or modify the current stamp duty holiday.
It currently doesn’t include the 3% ‘second home’ tax still levied on anyone buying a property that isn’t their main residence, which is still payable. The National Residential Landlords Association is calling on him to remove this, or risk a supply crisis in the rental market.