Property solicitors were waiting on tenterhooks this morning for Rishi Sunak’s widely speculated announcement that he will extend the stamp duty ‘holiday’ and any other measures that could boost the housing market in today’s Budget.
The chancellor of the exchequer is expected to announce that the stamp duty holiday for properties in England, which was due to end on 31 March, will continue for another three months.
Around 100,000 ongoing transactions are at risk of not completing before the 31 March deadline and the Law Society warned that the abrupt end of the holiday combined with a bottleneck in the market could cause significant disruption.
Property industry experts were quick to react when news of a possible extension emerged last week.
James Forrester, managing director of Barrows and Forrester, said: ‘The property market has stood tall and weathered the economic uncertainty posed by the pandemic and so it makes sense that the government would want to cling to this as perhaps their only indicator of handling the situation successfully. Of course, while a welcome move for many, it is simply another attempt to maintain an overheating housing market by fuelling demand rather than tackling the real issue of building more homes’.
Brendan Sharkey, head of construction and real estate at accountancy firm MHA MacIntyre Hudson, said: ‘The reduced [stamp duty] rate has proven to be a massive help to the construction sector as well as the wider economy and an extension of the relief to the end of June, which based on the latest reports seems likely, will be greeted enthusiastically by the sector. Although the sector has not had a bad start to 2021, the fall in the latest Purchasing Managers Index (PMI) hinted at some fears for the future, so continuing to shore up housing demand through tax relief will calm nerves.
‘The very success of the temporary SDLT relief just goes to show that the tax inhibits buyers in its current form. A permanent reduction to SDLT would give the sector a long-term shot in the arm. One innovative reform would be an exemption for older people looking to downsize, stimulating the market for retirement accommodation, where the UK still lags behind the likes of the US and Australia. Hopefully, this will be something the chancellor considers, if not in this budget, at least in the future.’