Petition for extension of stamp duty holiday to be debated in Parliament

Since July 8, 2020, the British Government implemented a stamp duty holiday for the first GBP 500,000 of a property’s value, providing it’s the purchaser’s primary residence.

The initiative was launched as a response to the economic impact of the COVID-19 pandemic. It was hoped that it would inject some much-needed life into the British property market, and the economy as a whole. The government said that the holiday would be in place until 31 March 2021.

For the first GBP 500,000, no stamp duty would be payable, and for the next GBP 425,000, only 5% would be payable. This provided a great opportunity for prospective house buyers to save tens of thousands of pounds on the cost of buying a new home.

The holiday worked

The government’s measures had the desired effect and many rushed to get a great deal. Property search sites reported huge increases in traffic to their sites as well as searches, enquiries, and sales. Consumers were also keen to visit Mortgage calculator sites such as Trussle. After finding a property they like, a visit to a site such as this allows them to evaluate what they can afford in relation to income and outgoings. It also provides insight into what people can afford considering the savings made on tax. The availability of extra cash due to the lack of stamp duty also meant prospective buyers were able to extend their budgets by a sizeable amount.

Estate agents said that the number of sales going through during Q3 and Q4 of 2020 was much higher than expected, even outperforming data from the same time in 2019.

As the end of the holiday drew closer, estate agents, unions, and members of the public called on the government to extend the holiday. As the UK continues to battle the virus with large swathes of the country facing restrictions, they argue that the financial boost provided by the break is still needed.

Petition reaches 100,000

A petition set up to call on the government to reconsider the deadline surpassed 100,000 and will now be debated in parliament. Previously, the government had said they would not extend the temporary relief measures. They said it was designed to be a temporary measure and that stamp duty provided an important stream of revenue for the state.

Not only do buyers believe that the extension should be approved due to ongoing economic instability, but there are fears that some will not manage to complete before 31 March. Some have even called for the tax to be scrapped completely, arguing that it has repressed people’s choices and hits the lower and middle classes the most.

In terms of prices, the market was pipped to grow around 1% in 2021 but if the stamp duty holiday does end in March, analysts say they are likely to stay flat or even drop as demand drops as well.

Now, estate agents, surveyors, mortgage lenders, buyers, sellers and other industry stakeholders will wait to see the outcome of the upcoming parliamentary debate. Some say there is still time to buy a property before the end of the holiday, and it’s definitely worth looking and seeing what is available.