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Chancellor Urged To Extend The Stamp Duty Holiday

November 12, 2020

The Government’s Stamp Duty holiday, which is due to run until the end of March 2021, has driven demand in the housing market with property transactions increasing by 27 percent between July and September.

However, the demand has also impacted lenders with average transaction times lengthening from 12 to 20 weeks. As a result, there are fears that homebuyers could miss out on the benefit of the Stamp Duty holiday.

To be certain of qualifying for the benefit, homebuyers should have had transactions underway by November - i.e. now! However, the imposition of the second lockdown is likely to create further delays.

Petitions and letters to the Government

A petition has now gone to the Chancellor asking him to extend the holiday for a further six months beyond 31st March. The petition points out that many prospective buyers could not afford to proceed if they had to pay full Stamp Duty.

This would obviously have a personal impact on buyers, but could also adversely affect the housing market and the house-building industry. At the time of publication, the petition had more than 3200 signatures.

As well as the petition from the wider public, a letter from members of the property industry has reached the Chancellor’s inbox requesting the same six month extension.

The letter was signed by NAEA Propertymark, The Guild of Property Professionals, the Residential Property Surveyors Association, Conveyancing Association, Society of Licenced Conveyancers, Kate Faulkner, the House Buying and Selling Group, Simplify, MAB, Landmark and Purplebricks.

The letter highlights the disruption to normal operations in the housing market and points out that many buyers may be unaware that they are likely to miss out on the benefit. It argues that a six-month extension would ‘smooth out any cliff edge and facilitate an orderly return to regular market conditions’.

Related: Buy in Leyton for under £500,000

Impact of the Stamp Duty holiday

Since its introduction in July 2020, the Stamp Duty exemption has played a key role in reinvigorating the housing market which had been affected by the uncertainties of Brexit and the backlog caused by the first lockdown.

With buyers likely to save up to £15,000, demand grew quickly for properties under £500,000. As well as the 27 percent increase in property transactions, October saw the highest number of mortgage approvals in the UK since September 2007.

The exemption has also had other important benefits. Commentators point out that the increased demand is providing a boost to Government tax revenues of almost £1 billion over the year. This is based on average expenditure of £4000 on transaction charges, including legal and survey fees.

The continuing exemption could also help to free up housing stock throughout the property ladder. Older homeowners, for example, may have been reluctant to downsize because of the significant costs, including Stamp Duty. Downsizing could free larger properties for growing families, with a subsequent ripple effect all the way down to properties for first-time buyers.

For mortgage related queries, please contact our friendly team at Portico Finance at or 07824 353803. !

Managing demand

These are positive developments that could help the continued growth of the housing market as an important contributor to economic recovery. However, the initial rush and the later proximity of the deadline have put pressure on lenders creating frustrating delays for buyers and threatening to derail the recovery.

Extending the Stamp Duty holiday would enable lenders to manage transactions more effectively and would help to spread demand more evenly.

The industry hopes that the Chancellor will announce an extension before Christmas to remove uncertainty. Given the recent decision to extend the furlough scheme until the end of March, the industry could be in for a positive announcement soon. So, with that in mind, let’s take a look at properties that you could make a considerable stamp duty saving on...

Properties under £500,000 with Stamp Duty savings

Light and airy. 

1 Bedroom, 1 Bathroom, John Archer Way, Wandsworth, SW18

£450,000 (Leasehold)

View property details.

In the heart of the city. 

1 Bedroom, 1 Bathroom, Portpool Lane, Clerkenwell, EC1N

£490,000 (Leasehold)

View property details.

Investment potential. 

1 Bedroom, 1 Bathroom, Knights Way, Grange Hill, IG6

£235,000 (Leasehold)

View property details.

Close to Clapham Common.

2 Bedrooms, 1 Bathroom, Lessar Avenue, Clapham, SW4

£499,950 (Leasehold)

View property details.

1 Bedroom, 1 Bathroom, Upland Road, Dulwich, SE22

£450,000 (Leasehold)

View property details.

1 Bedroom, 1 Bathroom, Disraeli Road, Forest Gate, E7

£255,000 (Share of Freehold)

View property details.

Portico can help with mortgage approvals as well as finding your dream home

If you’re looking for a property and hope to take advantage of the Stamp Duty holiday before the initial deadline, we’ve got plenty of great properties throughout London to choose from. Click here to view our available properties, or give us a call on 020 7099 4000. To find out how much your current property is worth, try our !online valuation tool.

We already know how much your rental property is worth. Type your postcode to find out and get an online valuation within 60 seconds.

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