The Intermediary Mortgage Lenders Association reiterated its call on the chancellor to ensure a smooth wind down to the end of the stamp duty holiday.

The move comes after reports that Rishi Sunak is considering pushing back the end of the suspension of the tax from 31 March to the end of June, according to The Times earlier this week.

The announcement is expected in the chancellor’s 3 March Budget. However, Imla backs “a flexible wind-down to the scheme to avoid a ‘cliff-edge’ simply being postponed to the end of June.”

The lender’s body is also calling for several other measures in the chancellor’s statement to help the economy to recover from the coronavirus crisis.

It wants to see further support for victims of unsafe cladding, additional help to boost engagement with green housing initiatives, and improvements to the waiting periods for borrowers who apply for loans under the Support for Mortgage Interest Scheme.

Imla executive director Kate Davies says: “Protecting the UK’s housing market should be high up on the chancellor’s priority list for this Budget. The current stamp duty holiday deadline of 31 March has created unprecedented levels of activity and put a huge strain on lenders and conveyancers as they race to complete transactions in time.

“We have asked for some flexibility to avoid penalising those who miss the deadline, very possibly through no fault of their own. While an extension may be welcomed by some purchasers, unless the flexibility we’ve argued for is built in it will simply kick the can down the road and create another “cliff-edge” in the summer.”

Davies adds: “The misery being caused by the cladding crisis has gone on long enough already – and while the government’s latest announcement – of a further £3.5bn to fund remedial work, taking the total available to £5bn – is welcome, Imla believes it still doesn’t go far enough. It’s been estimated that the total cost of removing dangerous cladding and repairing buildings is likely to be nearer £15bn – three times what the government is currently committing.”

Imla is also calling on the government to do more on mortgage support and the green economy.

Davies says: “Climate change is a huge issue and lenders support the government’s ambition to build back better and focus on green initiatives. The Green Homes Grant was well-intentioned, as was a recent Department for Business, Energy and Industrial Strategy consultation on improving home energy efficiency, but we think this challenge requires a much wider and more ambitious cross-Government strategy, rather than a piecemeal departmental approach.”

She adds: “We would also like to see a re-think on the rules surrounding the availability of the Support for Mortgage Interest loans. This used to be a benefit, but is now a loan, eligibility for which is tied up with Universal Credit benefit payments.

“It seems likely that a number of borrowers – who may not need to apply for Universal Credit – may temporarily lose all or part of their income as a result of the pandemic and could benefit from being able to access the SMI loan – which they will in due course repay, with interest. This could provide a lifeline to those in financial difficulty and keep more families in their homes.”