Peer-to-peer lending stakeholders have called for an extension to the stamp duty holiday and a tiered approach when it ends.
Chancellor Rishi Sunak unveiled a stamp duty holiday last July that cut the tax on the purchases of homes up to £500,000 in England and Wales.
It is set to come to an end on 31 March but speaking at the P2P Investing Summit today (28 January), a virtual event hosted by Peer2Peer Finance News and AngelNews, Damien Druce, management consultant at Druce Consultancy and formerly director of intermediaries at Assetz Capital, said an extension to the stamp duty holiday is essential.
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“It needs to be extended– the shock and trauma the market would feel would be too much,” he said.
“They need to go back and have a greater and wider reform to stamp duty.”
Terry Pritchard, director of Charter HCP and who plans on launching into the P2P space, said the stamp duty holiday should end with a tiered approach.
“It can’t carry on indefinitely, we need a tiered exit over the next 12 months,” he said.
Similarly, Paul Sonabend, executive chair of P2P property lending platform Relendex, called for an extension of the stamp duty holiday and for it to be scaled back using a tiered approach.
“The Stamp duty holiday was very badly thought through, it’s a major distortion and doesn’t affect the vast majority of homes,” he said.
“It has an incredible effect on confidence and anything that destroys confidence further as we come out of Covid will be disastrous,” he said.
“It needs to be extended and phased out in some way that makes sense.”
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Druce also told the panel that the property market is resilient and with a shortage in housing, will bounce back.
“The UK property market is probably the most resilient in the world,” he said.
“It suffers from turbulence but will always bounce back. It has a cyclical nature.
“We probably buck the trend from the rest of Europe. Home ownership is much more of an aim here.
“That tells me that as a P2P investment opportunity you don’t get many better than property backed loans.”
The P2P sector has repeatedly called for the extension of the stamp duty holiday, and for it to be reviewed by the government.
A petition with more than 120,000 signatures for the stamp duty holiday to be extended by a further six months will be discussed in Parliament on 1 February.
The petition said the extension would be to avoid people missing out on the stamp duty break through no fault of their own.