As was widely speculated, the Chancellor has today announced an extension to the stamp duty holiday as part of the 2021 Budget. The current stamp duty holiday, which was introduced in July after the first Covid-19 lockdown, was scheduled to cease on 31 March this year. It will now be extended to 30 June. The holiday raised the threshold for SDLT when purchasing a primary property up to £500,000, offering considerable savings, and was a factor in driving market activity throughout the latter part of 2020.
In addition to the extension, the scheme will now have a tapered ending with the nil rate band set at £250,000 from July until the end of September.
Head of the Residential Sector, Alasdair Dunne, comments: “The stamp duty holiday extension is welcome news. It will alleviate some of the pressure on the conveyancing process, which has been stretched almost to breaking point recently by trying to rush transactions through in record numbers. The news will of course come as a relief to those people who are in the process of buying and concerned that their completion may not have happened before the March deadline.
We are particularly pleased that in addition to the holiday extension, a tapering of the scheme has been announced. This will hopefully lessen similar conveyancing pressures in June and reduce the number of people facing the prospect of relying on tax savings that are suddenly unavailable due to circumstances beyond their control.
With the vaccine rollout a continuing success, and the end of lockdown seemingly in sight, the market will likely be buoyed by positive sentiment at the time the holiday does come to an end. This may help to offset a drop in transactions that would have been more likely had the holiday ended in March. The Chancellor has also announced a mortgage guarantee scheme to support buyers with 5% deposits to purchase a property with a value of up to £600,000, which should add to the number of people actively searching for a home. It feels like the right thing for the market and the economy ”
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