Partner Article

Lorraine Stratton-Webb, Partner and Head of Property at Clough and Willis, on why the government needs to extend the Stamp Duty Holiday

I think that most people would agree that the government has done a lot to support the economy and has helped businesses navigate their way through the COVID-19 nightmare of the past year. They haven’t always got it right, but we have witnessed unprecedented levels of direct help that has never been seen before.

One of the main pillars in propping up and stimulating the property market has been the Stamp Duty Holiday which was introduced in July last year and saw stamp duty on the first £500,000 of all property sales in England and Northern Ireland scrapped. It has been a lifeline to the housing sector and has driven transactions to a level that would have been unimaginable at the start of the pandemic. The knock-on effects have also been substantial, including safeguarding thousands of jobs in other related sectors, from surveying and estate agents to removals.

However, this temporary relief is due to end in March, and I fear it could well deliver a shock that has ramifications for months or even years to come unless a decision is made to extend it in next week’s Budget.

Things are without doubt improving - especially in terms of cases and deaths - but the economy is not out of the woods yet and it still needs all the help it can get as lockdown ends and consumer spending starts to hopefully ramp up. Economists are upbeat, but no-one really knows what will happen and how confident we will all be to get out there and spend, spend, spend. The theory of mass pent-up spending is all well and good, but will it come to fruition? Deciding to extend the Stamp Duty Holiday would be a bold move but one that should be taken, without question and soon.

It has incentivised many people to move, but the deadline of 31st March has placed considerable pressure on conveyancers, mortgage lenders and surveyors. My fear is that there is a real danger that transactions which are now underway won’t complete in time and the closer we get to it the more chance there is for people to back out. Why would someone risk being hit with a hefty tax bill which they’d quite rightly presumed wouldn’t be demanded?

This isn’t anyone’s fault; the professionals working on sales and purchases are under immense pressure themselves. They’re managing everything through remote working and no matter how much everyone tries, hold-ups and delays are inevitable. The government needs to understand the reality and take practical steps to keep those transactions afloat.

I’m advocating a practical and workable solution: simply extend it for another four months by which time hospitality, tourism and retail will all be back open and the economy should be in a better position. It would give clarity, reassurance and would have a wide positive economic impact. Three things we all need right now.

This was posted in Bdaily's Members' News section by Clough & Willis Solicitors .