Industry leaders call on the chancellor to extend stamp duty holiday

Estate agents have joined forces with other property groups representing the home moving process, including search agents, mortgage intermediaries, conveyancing, surveying, energy assessors and removal companies, to call on the chancellor to extend the stamp duty holiday by six months.

A joint letter, signed by a number of trade bodies and property firms, including The Guild of Property Professionals, NAEA Propertymark, the Residential Property Surveyors Association, BAR, Conveyancing Association, Society of Licenced Conveyancers, the House Buying and Selling Group, Simplify, Purplebricks, Mortgage Advice Bureau, and Landmark, will be sent to the chancellor later today urging him to extend the stamp duty holiday until September 2021.

The joint letter, seen by Property Industry Eye, outlines that the housing market infrastructure is under huge pressure as hundreds of thousands of buyers and sellers, agents, surveyors, lenders and conveyancers rush to beat the 31 March deadline.

The letter also calls on the government to work with the industry in order to develop a method to help smooth the end of an extended stamp duty holiday to prevent another cliff edge.

The stamp duty holiday and pent-up demand has left 140,000 more buyers in the queue to finalise their home purchase than a year earlier, as people rush to complete before the clock runs down.

According to Zoopla, there are currently around 418,000 residential property sales in the pipeline, up from 280,000 properties 12 months ago.

The latest figures from property data analysts TwentyCi suggest some 325,000 buyers will not complete before the 31 March deadline because of issues with conveyancing, surveying, mortgage and search services.

Mark Hayward, chief executive of NAEA Propertymark, commented: “The joint letter sent to the chancellor today is an important step in protecting those in the process of buying or selling a house that might miss out on the 31st March stamp duty deadline because of increased pressure on service providers within the industry which is causing delays for buyers and sellers in the sector.

“The group endorsing this letter represents the breadth of the home moving process including estate agents, search agents, mortgage intermediaries, conveyancing, surveying, energy assessors and removal companies.

“The boom, caused by the stamp duty holiday, has been hugely beneficial for the housing market; however, the stamp duty cliff edge on the 31st March 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.

“We are calling on government to rethink these timings, so pressure on the system can be released to allow transactions to complete and avoid a disorderly and distressing period for movers and businesses throughout the market.”

You can read the open letter by clicking here.

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14 Comments

  1. GPL

     

    …..and what happens when the next deadline arrives after any “extension” ……another “cliff edge”? ……more bawling?

     

     

     

     

     

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  2. Rob Hailstone

    “The letter also calls on the government to work with the industry in order to develop a method to help smooth the end of an extended stamp duty holiday to prevent another cliff edge.”

     

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    1. GPL

       
      ….is this the same “cliff edge” we’ve been through on previous stamp duty holidays?  
       
      The market exploded back into life prior to the SD Incentive, introducing it simply created a “cliff edge” ……but rather than sensationalise the “ending of it” let’s just refer to what it actually is ….the end of the SA Incentive.   
       
       

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  3. JamesDB

    Why not just look at extending it for those transactions that are already in progress, and have been for at least 8 weeks prior to the current “end date”.    That way, anything that is in the system will secure the discount.

     

    Well, this is my humble opinion on it anyway

     

    Happy Thursday folks – Stay Happy

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  4. MarkJ

    Stamp Duty Holiday ….. 8th July 2019 – 31st March 2020   ….no ones brought forward the end date.

    I think the number of people who are now unable to move …..due to no job/ job insecurity / mortgage changes / possibly increasing mortgage rates will be a bigger long term threat to businesses surrounding  the home moving process. (Both first time buyers and sellers buying on with a mortgage…)

    The Stamp Duty Holiday is just an artificial sticking plaster over the top of a bigger problem…that may be around for a while….

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  5. Andrew Stanton Proptech Real Estate Strategist

    ‘The Dickensian, snail pace, paper driven conveyancing process, combined with the slowness of mortgage lenders, is with Covid-19 at break point.
    The chancellor needs to ‘flatten the curve’ to complete; and have 31st of March as a date by which a sale has been agreed rather than completed, allowing stakeholders to exchange and complete in normal time without the pressure, drama and panic that is coming.’
    ‘As an agent in 1988, I saw chancellor Nigel Lawson cause; an unnecessary date specific completion race, rampant house inflation, pressure on the property system, and a boom to bust property market. The last thing the UK economy requires at present, with Brexit and Covid-19.’
    ‘Whenever a chancellor tinkers with SDLT, there is an equal reaction, 1988, boom to bust, 2017, scramble to buy a second home and house inflation, 2020 race to save up to 15K; resulting in house inflation and potentially hundreds of thousands missing the SDLT holiday cut off, causing mayhem.’

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  6. EAMD172

    Sent this to RS on 5/9/20 but not had a response:

     
    Dear Mr Sunak,
     
     
     
    Firstly, I would like to say thank you for all your policies throughout these difficult times in supporting not just individuals but businesses, families, and employees.
     
     
     
    The reason for my communication is that I am concerned about the potential disruption that may be caused when the stamp duty holiday finishes.
     
     
     
    I think the government has done a superb job of stabilising the house market pricing over the last 13 years. It stands to reason that house prices cannot increase more than average wages, unless there is a change in lending policies, interest rates, or property sizes. These three elements are the only way that house prices can be driven up or down.
     
     
     
    Having been in the estate agency business since 1982 I have seen various boom and bust situations, the most notable of which was in 1988/1989. In 1987 the government announced the removal of double MIRAS, which was a good idea except that it wasn’t implemented immediately but a date of August 1st, 1988 was put in place to implement the change. This resulted in an exceptional rise in house prices over the following eight months followed by the heaviest crash in prices in the history of the UK housing market, 40% in fact. Of course there were other influencing factors during 1989, particularly interest rates, but the spark was August 1st that lit the fire. 
     
     
     
    I am concerned that seeing the unbelievable increase in activity over the last few weeks, and the announcement from Nationwide Building Society today that prices have risen by 2% in August alone, that we may be heading for a similar, if not quite as bad, situation in March next year.
     
     
     
    A suggestion would be to stage the removal of the holiday. For example £500,000 on March 1st; £450,000 on June 1st; £400,000 on September 1st; £350,000 on December 1st.
     
     
     
    This would alleviate the pressure on the market, solicitors and would reduce the likelihood of price drops across the UK..
     
     
     
    Bearing in mind there are in the region of 23 million dwellings in England alone with an average price of £248,000 approximately, the total value of these dwellings is approximately £5.7 trillion. 
     
     
     
    If prices rise by, for example, 10% that puts approximately £570 billion of tax free, unearned income into the economy. Although this is not liquid it does mean that more people will move house and spend some of their equity on their new home, remortgage to improve or extend or even go on holiday, or take credit against their equity which will be spent in the UK business/retail/services/leisure sectors. Naturally generating tax income along the way. 
     
     
     
    Conversely should prices drop by 10% and people are then in negative equity or at least owning a home worth less than it was a year ago, they are likely to tighten the purse strings and spend a lot less, as effectively £570 billion would have been removed from the economy.
     
     
     
    I have seen our country spend our way out of potential recessions before, but also the housing market has driven the economy into recession before as well. Many people feel the housing market follows the economy, but in my experience the economy follows the housing market.
     
     
     
    It is just a matter of maths.
     
     
     
    I would be more than happy to enter into correspondence with you or to have a discussion if you so wish.
     
     
     
    Having predicted accurately the 1988 crash as well as the 2007 credit crunch and taking action accordingly at those times, I felt it would be churlish of me not to pass on my experience to someone who I have enormous respect for and clearly has the interests of the country at heart.
     
     
     
    Thank you for taking the time to read this.
     

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    1. AgencyInsider

      ‘Having predicted accurately the 1988 crash as well as the 2007 credit crunch …’

      Any chance of slipping me the Lotto numbers for this Saturday mate?

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      1. EAMD172

        My crystal ball only works with decent data input buddy!

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  7. Alan Murray

    Er has anyone noticed the Government has some rather more important situations on it’s plate to worry about than to think about “work with the industry in order to develop a method to help smooth the end of an extended stamp duty holiday to prevent another cliff edge.” A bit naive to think a letter might change their thinking? Although to be fair if it were endlessly posted on social media the Government might take more notice given that they tend to make decisions based on who shouts loudest about anything on Twitter.

    I would also be more inclined to take anything the Conveyancing Association said seriously if it was not mainly the firms they ‘represent’ that cause all the delays and problems proper conveyancers come up against on a day to day basis. Their energy would be far better served ensuring those firms are fit for purpose when it comes to dealing with conveyancing in the real world.

    I do think however that the deadline should be extended, and with another lockdown imminent it is that, rather than letters, that is likely to focus thinking. Next year is likely to be much worse than this in terms of recessionary pressures so with the benefits a buoyant property market brings to the economy probably outweighing the loss of stamp duty it would be very foolish not to keep the situation as is. I would suggest the Chancellor would be best served saying it will continue ad infinitum whilst a replacement is under review, that takes away any pressures caused by deadlines and should keep the market moving, but not artificially exploding. But knowing this Government nothing logical can really be second guessed, the most likely scenario could be some sort of announcement will probably come on 24th March next year.

    Just a point for my conveyancing colleagues too. Stay off social media telling everybody how busy you are? If you have the time to post that you have just had your dinner then you are not busy. I am fed up of seeing posts from people saying how busy they are, when compared to the early noughties this is nothing, We did sixty to eighty completions every month without fail, and twenty to thirty on a busy Friday. Thirty in a month is nothing to shout about. And therein is an obvious problem. Conveyancers today, despite we are told having better technology available, really cannot cope with larger volumes. Lack of training in the profession is an obvious reason, maybe too many have coasted for too long, likely the majority are simply not good enough. Unfortunately they have been found out. But rather than complain, maybe you should just crack on, I really do not want to see any more complaints on other social platforms it is utterly embarrassing.

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    1. Rob Hailstone

      I normally agree with most things you post Alan, but find todays effort a little condescending. This initiative is intended to help the property market stakeholders and the public/economy. Few quick points:
      Transactions in the early noughties were far easier to progress and complete than they are now.
      Social media, for some, can be fun and a means of relaxation. You are really showing your age and a lack of empathy for many in your profession.
       
      If you don’t think a letter will help, you can always chain yourself to some railings.
       

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      1. Alan Murray

        Maybe you could send the letter by pigeon post Rob. When people are complaining conveyancers are behind the times and do not take up innovative new technology you send a letter? Please, it just proves the people right who say as a profession we are behind the times.
        It is called an opinion, I find your response offensive and confusing. How can you say transactions in the early noughties were more complete than they are now? Utter nonsense the system we work with was the same as is now, maybe your mind is playing tricks?
        It is an opinion based on what I see. Sorry it does not agree with yours but everyone is allowed one, just not one that disagrees with yours it seems? I have plenty of empathy with the people in the profession who do not complain and get on with the job and do it properly. I know and respect plenty of them. What I do not like is people who complain and do not put their clients first, and sadly there are far too many of them.

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  8. Rob Hailstone

    The ‘letter’ will of course be emailed.

    There are now a lot more hoops (regulation and red tape) for conveyancers to jump through now than there was 20 years ago.

    Have you watched this:

    https://www.todaysconveyancer.co.uk/main-news/solicitors-linkedin-video-taps-frustration-conveyancers/

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    1. Alan Murray

      Condescnding moi?

      Maybe you are just too corporate to notice what is going on, or just lack the passion some of us still have? There have always been rules and regulations for conveyancers to deal with, it is called the Law! Excuses, excuses all the time nobody ever tries to come up with answers to speed things up? What are you going to do if the letter goes into the Spam folder, throw yourself under a racehorse?

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