The Times reports today that chancellor Rishi Sunak plans to extend the stamp duty holiday until the end of June.

The announcement will be made during the 3 March budget.

Questions remain over whether the rumoured extension will apply to new buyers or only those caught in the transaction pipeline.

Last week, the Centre for Policy Studies estimated that the existing stamp duty holiday has so far increased house sales by 140 per cent, with 83 per cent of people buying a ‘primary’ home not having to pay the tax.

The think tank says the government should increase the threshold for primary residences to £500,000 on a permanent basis or get rid of stamp duty altogether, the loss of £3bn in tax revenue offset by an extra 20,000 houses built a year.

Regarding the proposed holiday extension, Andrews Property Group chief executive David Westgate says that merely extending the stamp duty holiday would be 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,” he says.

“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.

“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.

“By allowing transactions, where a mortgage offer has been granted before the end of March, to complete at their own pace, the cliff edge scenario could be avoided.”

And Glenhawk chief executive Guy Harrington adds: “Whilst a short extension was inevitable given the backlog of transactions, stamp duty has been a strong revenue generator for the government and at a time when it can ill afford to be bleeding money, this is not a long term solution.

“As with Help to Buy, a tapering of sorts would ensure that the relief continues to benefit those most in need, whilst avoiding a situation similar to after the first lockdown where transactions fell by as much as 50 per cent.

“A housing market correction would only further add to the already considerable economic woes facing UK consumers.”

Yorkshire Building Society strategic economist Nitesh Patel, meanwhile comments: “We would urge the government to reconsider at a taper of the tax relief – a period of grace which would allow any property sales which have been agreed and have secured a mortgage approval given a set period of time to complete their transaction with stamp duty reduction benefit.

“If the policy is merely extended, we may well face the same situation of home buyers who are caught out when the extension comes to an end.”