David Hollingworth: Govt could extend stamp duty holiday
The government could elect to extend the stamp duty holiday temporarily, according to David Hollingworth, associate director of London and Country.
Hollingworth explained that the likelihood of an extension to the stamp duty holiday depends on the impact felt on the economy from COVID-19 at the beginning of next year.
He said: “However, [extending the deadline] runs the risk of simply kicking the can down the road and will simply shift the deadline.”
Alternatively, Hollingworth believes that the government could decide to make a more permanent change to stamp duty and stick with the higher nil rate band that we currently have.
A further approach to the extension of stamp duty could be to allow cases, which have reached a certain point in the house buying process, to continue without being required to pay stamp duty land tax (SDLT), even if they surpass the March deadline, Hollingworth said.
He added: “That could take some of the pressure off completions, but could only introduce further complications.”
Looking to the possibility of a phased withdrawal, Hollingworth said that this approach could remove the “the all or nothing element”, as well as help buyers avoid the potential for chains to collapse if the stamp duty bill leaps overnight on a completion that cannot meet the deadline.
Hollingworth said: “Avoiding a cliff edge in a market still getting to grips with the impact of the pandemic seems like the right thing to do, but in the meantime it makes sense to be setting borrower expectation already.
“With delays still being felt in mortgage processing, and pressure only like to grow on conveyancers, being clear that there cannot be guarantees of completion will be important in managing expectation.”
