Following the Budget announcement, Chancellor Rishi Sunak has confirmed that the stamp duty holiday will be extended until the end of June, followed by a tapered approach until the end of September.
Sunak said that “to smooth transition back to normal”, the nil rate band will reduce from £500,000 to £250,000 from the end of June until the end of September, before reverting back to £125,000 from October 1st.
The stamp duty holiday was first introduced last year to reignite the UK housing market following months of closure during the first coronavirus lockdown.
In July the government raised the stamp duty threshold from £125,000 to £500,000, helping to boost market activity and sending house prices rocketing.
But the pandemic has also slowed the sales process and forced some buyers to wait months for the transaction to complete.
In recent months property experts had warned that many home buyers would be unable to complete their deals before the 31 March deadline due to a backlog.
Speaking in today’s Budget Sunak said: “Due to the sheer volume of transactions we’re seeing, many new purchases won’t complete in time by the end of March.”
Chris Croake, Director of Choice Mortgage Solutions, commented : “The news today confirming the extension of the stamp duty holiday is exactly what the property market needs. We have seen first-hand that the appetite among buyers remains strong, and it makes sense for the Government to build on this momentum through targeted tax reliefs.
My advice to both buyers and sellers is to act sooner rather than later. When the initial stamp duty holiday was introduced, we originally felt that the deadline of 31 March 2021 was achievable for all, however, with the surge in business levels and mortgage providers taking longer to process applications, what should be a typical 3 month transaction can take much longer.
Although we are seeing glimmers of hope in the mortgage market, lending is still very much on an individual basis and buyers need to ensure that they are engaging with the correct lender to get the loan they require. Lending criteria is still changing on a day by day basis so it makes sense to engage the services of a mortgage adviser who can help speed up the process and get you the loan you need.”
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