Economist's view: Stamp Duty reduction end should be tapered beyond 31 March 2021
Nitesh Patel, Strategic Economist at Yorkshire Building Society, said:
The stamp duty holiday is coming to a hard stop on 31 March, 2021, which may not give enough time to for buyers and sellers, who have already agreed sales and have mortgages approved, to complete the sales. This could cause issues for home-buyers around financing the stamp duty charge and may even cause some transactions to fall through. Based on the average value of a home, buyers who are caught out by the cut-off date would face an average tax bill of £2,400, but for those buying homes worth £500,000, this figure would be £15,000.
We would support allowing any property purchases which have had a mortgage approval granted by 31 March an extra three months, to 30 June 2021, to complete their sales with the benefit of the temporary Stamp Duty reduction. New mortgage commitments approved after 31 March would not benefit from the reduced rates.
We are mindful that social distancing measures are likely to be in place and this is extremely likely to be an exceptionally busy period for mortgage lenders, so we also believe this would also help lenders to reduce operational pressures which are likely to build up immediately ahead of the deadline.