A possible extension of stamp duty until the end of June could potentially kick the can down the road when it comes to dealing with problems with the housing market.
The chancellor Rishi Sunak is said to be considering a limited extension through to the end of June to prevent thousands of homes sales from falling through, according to the Times.
But the rumoured three-month stamp duty holiday extension may not provide enough time for many of the existing residential property deals to be completed before the deadline, with the planned extension simply ‘delaying the inevitable’ cliff edge, according to Jess Simpson, founder of Jess Simpson Property Search.
Simpson commented: “Whilst the news that the stamp duty holiday is likely to be extended until the end of June will be welcomed by many – and indeed give buyers renewed motivation to press on with their moves – it is important to point out that it is only compounding the issues currently faced by industry.
“Solicitors who are already up to their ears in paperwork will find that their workloads will only significantly increase as we see double the amount of properties coming on to the market, with sellers looking to make the most of the boom. Setting a new deadline for the stamp duty holiday extension will provide temporary relief but really it is delaying the inevitable – with the pressure set to mount as we approach June.”
Mortgage broker Trussle and Legal & General Mortgage Club are among a number of companies now calling on the government to adopt a ‘tapered’ ending to the stamp duty Holiday.
Fresh research from the pair claims that the economy could benefit from a £28bn injection if the government ‘tapered off’ the Stamp Duty Land Tax (SDLT) holiday rather than sticking to a hard stop,
In addition, research by Trussle and Legal & General Mortgage Club also found that a tapered ending to the SDLT holiday would help protect homebuyers from unexpected financial strain, as a collapsed housing transaction can cost on average £5,439.80 in estate agent fees, valuations, surveys and legal costs.
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