‘No surprise if stamp duty cut extended’ amid third national lockdown
The housing market in England will remain open during the latest national lockdown but given the fast-approaching stamp duty cut deadline, mortgage experts expect it to be extended.
The stamp duty holiday deadline falls on 31 March 2021 and despite calls by various campaign groups, industry experts and an official petition with thousands of signatures, the government has been firm that this temporary relief would not be extended.
However, given that England will now enter its third national lockdown, experts are quietly confident that the stamp duty deadline will be extended, even though the property market is still open for business.
Andrew Montlake, managing director of mortgage broker, Coreco, said: “Though the property market remains technically open, there will now be considerably more logistical issues for the simple reason that a lot of people will be working from home.
“Lenders, valuers and conveyancers are already experiencing bottlenecks and delays given the sheer amount of applications going through and the administrative upheaval caused by the latest lockdown will only serve to accentuate them.
“We would not be surprised if the Treasury makes an announcement this week about extending the Stamp Duty deadline to keep demand alive and give the property industry some much needed wiggle room.”
George Franks, co-founder of Radstock Property estate agents, said: “In theory, it’s business as usual for the property market but in practice that’s simply not the case.
“Transactions are already under a lot of time pressure and the new lockdown will compound the issue, as people work from home or fall ill with the new strain.
“Extending the deadline by at least another month to reflect the new national lockdown seems like the right thing to do in the current circumstances and I’m sure it’s on Rishi Sunak’s agenda.”
‘Stamp duty cut is an imperfect solution’
For Karen Noye, mortgage expert at Quilter, the next few months will be extremely challenging for the housing market, though mortgage approvals rose to their highest level since 2007.
“It is clear the housing market has been burning bright thanks to the fuel of the stamp duty cut, but the blaze will likely be extinguished without any further government support.
“Given the amount of time it takes to offer, exchange and complete, in reality the 31 March 2021 deadline for the stamp duty cut has already expired, so the housing market once again finds its self in a precarious position once the incentive to move and benefit from the stamp duty cut ends.
“The freeze in the housing market will be compounded by the dire economic environment expected over the next few months with the OBR – the government’s fiscal watchdog – warning that Covid-induced unemployment will peak at 7.5% in the second quarter of 2021, which will inevitably hit mortgage applications.
“The stamp duty cut is an imperfect solution. There are valid concerns that it has inflated property prices and has done little to help, and has even hindered, first time buyers from getting on the property ladder. But it should be seen as a sticking plaster to patch up the housing market through the difficult first half of the year before the economic recovery can begin,” she said.