There had been much hope Rishi Sunak might push the deadline for the tax break beyond 31 March 2021 in a bid to prevent what’s being described as a ‘cliff edge’ scenario when the duty is reinstated.
Indeed, earlier this week Paul Broadhead of the Building Societies Association (BSA) said it was concerned about such an abrupt end occurring to the holiday. The BSA, along with many other organisations, has called on the government to find a way to lessen the impact by, for example, tapering its removal.
Martijn van der Heijden, chief of strategy at online mortgage company, Habito was one of a number who had pushed for an extension of the holiday.
Speaking just after the chancellor’s spending review yesterday he said: “Sadly, this hasn’t come today.”
He added: “Whether or not buyers make the tax holiday deadline at this stage is hugely dependent on their situation and the circumstances of their seller and other parties involved in the process.”
Meanwhile, Rob Houghton, CEO of reallymoving, said thousands of homebuyers would now face the prospect of missing out on the stamp duty holiday if their purchase didn’t complete by the 31 March deadline.
“In practical terms we will see a rapid worsening of the current bottleneck in the conveyancing process as everyone rushes to complete by the deadline, with many transactions inevitably delayed as solicitors struggle to cope,” he warned.
“This will cost buyers thousands in stamp duty they haven’t budgeted for, in many cases making the move unaffordable and causing chains to break down.
“The housing market has been absolutely critical in keeping the economy moving over the last few months and there’s no doubt further challenges lie ahead, with unemployment rising and economic growth in decline.”
He added: “Coinciding the end of the stamp duty holiday with the end of the current furlough scheme could have a serious impact on the economy. Extending the holiday would have helped support the housing market, promote economic activity and preserve people’s financial security at a critical time.”
Home Building Fund
In yesterday’s spending review, Sunak also announced the introduction of a £7.1 billion national Home Building Fund. It is part of £20 billion of investment to support new housing initiatives, £12.2 billion of which will be injected into an Affordable Homes Programme.
This part of the chancellor’s review was welcomed by the industry which praised this as a measure which would offer more funds to improve the supply of affordable homes for sale and rent.
What’s more £2.2 billion of new loan finance will also be put aside to support house builders, including delivering a new Help to Build scheme for custom and self-builders. This also includes funding for Modern Methods of Construction.
There is also £100 million of funding to support the release of public sector land to be used for building projects.
Andrew Baddeley-Chappell, CEO of the NaCSBA, said these announcements made it clear the government was fully committed to doing more to increase the diversity of choice in the new homes market.
He added: “Greater choice will lead to great innovation and competition that will lead to more and better homes.
“We hope to see the new Help to Build scheme up and running as soon as possible together with the additional wonderful, affordable sustainable, uplifting new homes that it will help deliver.”
