Urgent action is needed to prevent tens of thousands of property market transactions collapsing at the cliff-edge end of the stamp duty holiday.
The Law Society of England and Wales is urging people to write to their MP calling for swift action to protect consumers ahead of the budget on 3 March and the stamp duty land tax (SDLT) holiday deadline on 31 March.*
“While the SDLT holiday was a welcome step to help revitalise the property market after the impact of lockdown, it has become increasingly clear that the abrupt end of the holiday on 31 March combined with a bottleneck in the market could cause significant disruption,” said president of the Law Society David Greene.
“Thousands of transactions and chains could collapse at the last minute, leaving consumers who had hoped to take advantage of the concession to move into their dream home instead stranded and saddled with unrecoverable costs for transactions that fell through.
“Urgent action needs to be taken to soften this cliff edge and protect home buyers and sellers from being out of the scheme, out of luck and out of pocket.
“That’s why we are encouraging people to write to their MP urging them to raise these concerns in Parliament and with the Chancellor of the Exchequer, and to ask the government to take swift action before 31 March.”
Analysis by Rightmove suggests that around 100,000 buyers will miss out on the stamp duty saving.**
The Law Society has identified three different options for addressing this problem, to help improve the situation for consumers who are currently in the process of buying a home:
- extending the SDLT holiday, to allow more time for buyers to complete transactions before the holiday comes to an end
- implementing a tapered transition from the full SDLT holiday to the end of the scheme, through the creation of an interim period in which buyers can benefit from a reduced SDLT concession, to help smooth the cliff edge and reduce the risk of a significant impact on consumers and the market, or
- introducing a grandfathering scheme for transactions which have not completed by the cut-off date, so that buyers in transactions that have already progressed significantly by 31 March but which have not yet completed can continue to benefit from the SDLT holiday
“We urge the government to take swift action ahead of the end of the holiday on 31 March, to protect consumers and to support the orderly working of the property market,” added David Greene.
Credit: Nick Mayo | The Law Society