Chancellor Rishi Sunak is expected to extend the stamp duty holiday until the end of June, according to new reports.
The Times has reported that Sunak will announce the extension in his 3 March Budget speech, following pressure from property lenders and fellow MPs.
Property experts had warned of a “cliff edge” scenario for the property market if the stamp duty holiday was set to end as planned on 31 March 2021.
“Hundreds of thousands of transactions have been caught up in the logjam caused by the rapidly approaching deadline and many people face being penalised through no fault of their own,” said Iain McKenzie, chief executive of The Guild of Property Professionals.
“While it would be positive to see an extension, an abrupt end to the stamp duty holiday, whenever it happens, could cause harm to the economy and disrupt the property market.
“A gradual phasing out of the scheme would ensure that consumers still waiting to complete aren’t hit in the wallet and would make more sense, as a cliff-edge at any time is an unnecessary threat.”
Property peer-to-peer platforms have also called for a tiered approach to the end of the stamp duty holiday, with Damien Druce, management consultant at Druce Consultancy, saying that “the shock and trauma the market would feel would be too much.”
However, other industry stakeholders have warned that a three-month extension is “simply kicking the can down the road”.
“We will have the same cliff edge scenario in three months with buyers desperately rushing to complete sales, but facing delays due to conveyancing issues,” said David Westgate, group chief executive, Andrews Property Group.
“Conveyancers are already struggling to work their way through the growing pile of cases accumulating on their desks.
“Extending the deadline to the end of June will simply add a whole lot more cases to the bottom of the pile, and clog up the system.
“Also, bear in mind that with lockdown restrictions due to be lifted, this will fuel the property market as we come into the traditionally busy Spring period.
“Transactions could go through the roof causing more bottlenecks in the conveyancing process.
“A much better solution would be a tapered end to the stamp duty holiday to allow conveyancers the time to work their way through cases.”