Hope for a stamp duty holiday extension

Most people in the UK are hoping to hear that the current stamp duty holiday will be extended by Chancellor Rishi Sunak in next week’s budget, according to recent research.

The reduction in the rate of stamp duty to zero per cent for all properties valued at £500,000 has been credited as being instrumental in keeping the market buoyant through the latter months of the pandemic.

The holiday, however, which has caused a flurry of activity in recent months, is due to end on Wednesday, March 31, leaving those in the industry concerned about a possible plummet.

A recent poll conducted by MoneySuperMarket revealed that some that 74 per cent of Brits support a three-month extension until the end of June.

The price comparison site asked more than 5,000 people what action the chancellor should take.

Approximately 74 per cent said the holiday should be extended because it is helping the market; 19 per cent suggested it was no longer needed and seven per cent had no opinion.

Previous research commissioned by MoneySuperMarket found nearly two thirds of prospective buyers were in the market due to the scheme and 60 per cent said they would change their buying plans if the scheme was not extended.

Jo Thornhill, finance expert at the company, says: “Our research shows that there’s clear appetite for the chancellor to formally extend the stamp duty holiday past its current end date of March 31.

“The policy has clearly proved popular with buyers, stimulating a boom in the market despite the challenging conditions in the wider economy. And, crucially, it has removed another cost for many first-time buyers, making that first step onto the ladder that little bit easier.

“While we welcome an extension, looking further ahead, a phased deadline where the benefits are gradually reduced would prevent a ‘cliff edge’ scenario which puts pressure on the market overall.

“Aside from the stamp duty holiday – we believe the government needs to put in place longer term support for the housing market.

“It’s still far too difficult for first time buyers to buy a home and for most young adults it’s a far-off dream.

“One way of doing this would be to support an increase the availability of mortgages for those with a five per cent deposit.

“We know this is something the government is looking into and we’re looking forward to seeing their proposals in due course.”