They say you can have too much of a good thing. Most people who have looked to buy a home in the past year or so would say that the stamp duty holiday has been a good thing. But according to new research, the majority of brokers in the mortgage industry are keen for this good thing to carry on.
The stamp duty holiday was originally brought in to help galvanise the mortgage industry during the difficult days at the height of the Covid-19 pandemic. This saw people in the process of buying homes not having to pay the reasonably significant additional tax of stamp duty. This adds another bit of cash to an already expensive task.
The stamp duty holiday has been extended previously, but it is due to come to an end on 30th June 2021. However, new research has found that a majority of brokers within the mortgage industry are keen to extend that holiday.
Why extend the stamp duty holiday?
The stamp duty holiday was originally introduced to help support the mortgage industry in a difficult time. And while things are looking brighter than they were this time last year, the mortgage industry could certainly still do with any helping hand it can get.
It is felt that extending the stamp duty holiday would help to keep the mortgage market buoyant and provide an extra incentive for people to get their house moves moving.
Extending the holiday could also relieve pressure on people within the industry such as solicitors. With buyers particularly keen to benefit, there has been something of a rush to cash in on the chance to benefit from the stamp duty holiday. If there is no extension, it’s likely that thousands of people could miss out on the holiday, and this could ultimately lead to many deals falling through completely.
There are even some calls to scrap stamp duty altogether for houses beneath a certain value, though this would be a somewhat radical move and is unlikely to happen any time soon.
How many brokers are keen on extending the stamp duty holiday?
Brokers in particular have been pretty vocal on this topic, and new research from Twenty7Tec has found that two-thirds would be in favour of extending the stamp duty holiday.
Around 50% indicated they would be keen on a three-month extension of the stamp duty holiday, taking it to the end of September 2021 at the very least.
What is Roots Mortgages’ view?
We are very much of the view that the stamp duty holiday should be extended. The benefits for house buyers are substantial, while if an extension is not made, many people will miss out and have to stump up additional funds in order to move home.
While this is inevitably going to have to happen at some point (unless it’s scrapped completely), we do not feel the market is yet in a position to do so seamlessly. Buyers need all the support they can get at present, and extending the stamp duty holiday would certainly be a way to do this.
Will it happen?
It’s hard to know whether Chancellor Rishi Sunak will choose to extend the holiday again, having already done so in March.
The official party line at present is that it will culminate on June 30th, but a tapering period over the next three months will happen. This would see houses beneath £250,000 still benefiting from the holiday, before stamp duty goes back to how it was pre-Covid in October. This would see any purchase of a property over £125,000 having to pay it.
It’s obviously getting close to the deadline, so keep your eyes peeled for an announcement from Sunak. We at Roots for one certainly hope the extension does come!