It is calling on the chancellor to push back the 31 March deadline for the temporary tax break to allow those who are already in the process to buying their home to benefit.

The BSA said the continuing pandemic and third lockdown had already led to increased delays in the home buying and selling process due to social distancing measures, illness and home-schooling.

This meant, it warned, with the 31 March cliff-edge deadline fast approaching many buyers and sellers, who had already agreed sales and mortgages approved, were unlikely to be able to complete the sale within the deadline.

And, in these circumstances, the transactions were at risk of falling through and chains collapsing, leading to disruption in the housing market and causing economic uncertainty at the time when we hope the wider economy will begin to pick up.

The organisation believes a tapered end of the Stamp Duty holiday would allow any house purchase where the mortgage approval has been granted by the end of March, an additional three months to complete while still benefiting from the rate reduction.

In addition to supporting homebuyers who were likely to have budgeted based on the Stamp Duty saving, the taper would also ensure lenders and conveyancers were able to manage operational pressures in a Covid-secure way, the BSA argued.

Economic benefits

Paul Broadhead, head of mortgages and housing at the BSA said the Stamp Duty holiday had enabled a return to a fully-functioning housing marketing and had likely had much wider economic benefits as new homeowners increased their spending on furniture, appliances and ancillary services such as removal companies, cleaners and decorators.

“The chancellor will also have reaped some reward through the associated VAT payments,” he added.

“However, the unprecedented increase in property transactions, which together with the necessary Covid-19 restrictions, have resulted in unexpected delays in completing house purchases.

“Those already in the house buying process anticipate benefiting from the rate reduction and should not penalised because of Covid-related delays in the process that are completely out of their control.

“It would be unfortunate if the positive effects of the Stamp Duty holiday unravelled for the sake of a short extension.

“A three months tapered end, similar to the one announced [last] week for the Help to Buy: Equity Loan, is therefore a small but necessary change.”