The stamp duty land tax (SDLT) holiday that was introduced by Chancellor Rishi Sunak helped to stimulate a mini-market boom following the three-month closure of the property sector as a result of the coronavirus pandemic in 2020.
The holiday itself is set to end on 31st March. But talks of an extension have been building momentum over recent months as a petition asking the Government for a 6-month extension eclipsed the 100,000 signature threshold and resulted in the petitions committee holding a virtual hearing to enable the points of view to be heard.
The SDLT holiday has split the sector, and sometimes it has been viewed as a poisoned chalice. However, there are those who hope the ‘leaked’ news that the holiday could be extended by six weeks could become a reality. On the other hand, there are those that just want the 31st March 2021 to be over with.
At Today’s Conveyancer we reached out to conveyancers and firms in the sector to see what their views were on the potential extension. Did they think it would have the positive effect of avoiding completion chaos, or would it just add more delay to an already logjammed system that people are working around the clock to rectify?
Kim Derbyshire, Head of Conveyancing at Walsh Solicitors, commented:
“The SDLT holiday has been a welcome break for many homebuyers and home movers during the course of the pandemic, and has ultimately allowed the property market to stay open somewhat.
“The deadline is 31st March 2021, and the current rules state that any transactions which are to benefit must complete by this date.
“However, if this six-week extension was successfully brought in, I think it could lessen the pressures in the industry for conveyancers who are under so much pressure at the moment, and allow more clients to benefit from the holiday.
“On balance though, there are some downsides to this proposed extension. Which include increasing an already pressurised workload for conveyancers for a longer period of time. Plus consideration needs to be given to the long-term effects on the economy and its recovery. A lot of money has been ploughed into the pandemic across the board, and SDLT is a large income for the government, which they could use to begin to recoup the coronavirus debt.”
Rob McKellar, Head of CLS Strategic Growth & Residential Conveyancing at Slater and Gordon, commented:
“The government has created a Gordian Knot with the SDLT deadline. Extending it would reassure buyers halfway through the process but who are at risk of missing the deadline. The added market activity sparked by the tax break also trickles down to other associated industries such as home improvements, furnishings and removals. A buoyant and liquid housing market is also a major driver of confidence in the wider economy. An extension would also allow pressure in the market as everyone pushes to complete by the end of March to ease, meaning more consumers experiencing a smoother journey to the finish line.
“However, there are some cons to an extension. It just kicks the problem down the road unless the cliff edge becomes a tapered approach. A short extension is unlikely to benefit those who have not yet entered the conveyancing process. Plus lost revenue puts a hole in the government’s budget.”
Chris Proctor, Solicitor at Hattersleys Solicitors, said:
“Whilst the SDLT holiday has provided a welcome boost for our industry in troubled times, any ‘holiday’ has to come to an end (unless the government decides to completely reform or scrap SDLT). It doesn’t matter whether the deadline is 31st March, 30th April, 30th June etc, there will be a stampede of buyers trying to get their transaction over the line. Extending the deadline will only result in another surge of last-minute buyers, increasing the already high pressure on weary professionals who have been doing their best amidst a surge in demand over the last few months.”
Rachel Howe, Head of Conveyancing at Frodsham Solicitors, commented:
“Although I am certain the news comes as a much anticipated relief to buyers gridlocked in the current Conveyancing ja, I am of the opinion that an extension to the deadline will simply serve to prolong the issue we are facing currently. Buyers will still miss out on the relief, just at a later date. The industry as a whole is seeing unprecedented demand and all professions, particularly solicitors and Conveyancers are struggling to keep up. My suggestion would be for transaction with some financial commitment only to be offered an extension for example; exchange; newbuilds exchange without a set completion date or searches ordered/mortgage valuation paid for. This would ensure those already financially invested or committed do not lose out due to the unprecedented demand and delay. It would serve to prevent many chains from collapsing whilst giving the industry a good chance to catch up and get the transactions completed.”
Rob McKellar, Head of CLS Strategic Growth and Residential Conveyancing at Slater and Gordon, said:
“The government has created a Gordion Knot with the SDLT deadline. Extending it would reassure buyers halfway through the process but who are at risk of missing the deadline. The added market activity sparked by the tax break also trickles down to other associated industries such as home improvements, furnishings and removals. A buoyant and liquid housing market is also a major driver of confidence in the wider economy. An extension would also allow pressure in the market as everyone pushes to complete by the end of March to ease, meaning more consumers experiencing a smoother journey to the finish line.
“However, there are some cons to an extension. It just kicks the problem down the road unless the cliff edge becomes a tapered approach. A short extension is unlikely to benefit those who have not yet entered the conveyancing process. Plus, lost revenue puts a hole in the government’s budget.”
The Law Society for England and Wales is calling for urgent action to be taken before the deadline to prevent tens of thousands of property transactions from collapsing at the cliff-edge of the holiday. They appear to be in favour of an extension or tapering of the holiday and are urging people to write to their local MP.
David Greene, President of the Law Society, said:
“While the SDLT holiday was a welcome step to help revitalize the property market after the impact of lockdown, it has become increasingly clear that the abrupt end of the holiday on 31st March combined with a bottleneck in the market could cause significant disruption.
“Thousands of transactions and chains could collapse at the last minute, leaving consumers who had hoped to take advantage of the concession to move into their dream home instead stranded and saddled with unrecoverable costs for transactions that fell through.
“Urgent action needs to be taken to soften this cliff edge and protect home buyers and sellers from being out of the scheme, out of luck and out of pocket.
“That’s why we are encouraging people to write to their MP urging them to raise these concerns in Parliament and with the Chancellor of the Exchequer, and to ask the government to take swift action before 31 March.”
One Response
There is no point extending the deadline whilst we are still in lockdown. A lot of the slow down is caused by those in the industry (lenders, search agents, solicitors, conveyancer etc.) working from home. Any extension whilst in lockdown will not solve any problems and will merely try and force more completions through another deadline by Conveyancers/Solicitors who have already had enough.