Budget 21: Government should have revealed stamp duty plans sooner

Jake Carter

March 3, 2021


The government should not have left it so late to announce the tapering of the stamp duty holiday according to Martijn van der Heijden, chief financial officer at Habito.

During the Budget, the government revealed plans to extend the stamp duty holiday and increase the nil band rate until 1 October.

The holiday will be tapered with the nil rate band staying at £250,000, double its standard level.

However, van der Heijden believes the government should have detailed their intentions sooner, as he believes many sellers and buyers may have lost out on transactions when it looked like it was too late to complete by the 31 March.

He said: “Now they have either lost the opportunity or we will see a mad rush again with strain on the process, which may again still see people miss out.

“This policy is still a sticking plaster, rather than a holistic review and solutions to the property taxation and home buying schemes.”

Alicia Kennedy, director of Generation Rent, looks to the protection measures for jobs within the Budget.

She said: “Rishi Sunak said this Budget protects jobs, but we know that redundancies are already rising at a faster rate than the 2008 financial crisis.

“Two in five private renters are now relying on benefits and 715,000 households do not get enough Universal Credit to cover their rent.

“This Budget has done nothing to help those without jobs protect their homes.

“Today the Chancellor ignored the very real rent debt crisis and without government action renters will have no protection from eviction and homelessness.”

Kennedy believes that a COVID-19 Rent Debt Fund is required in order to clear arrears as well as an extension to the eviction ban as long as restrictions are in place.

She added: “Instead, the Chancellor has announced 95% mortgages, which is completely out of touch when 60% of private renters had no savings at the start of the pandemic and another 18% have had to use savings to pay their rent in the past year.

“The government tried a Mortgage Guarantee Scheme eight years ago and all it did was push up house prices, while another half a million households have got stuck renting over the same period.

“Stoking demand with more lending and extending the stamp duty holiday will not fix the underlying shortage of homes available to buy.”

Alex Hammond, director of the Mortgage Market Alliance, believes that while headlines of a Mortgage Guarantee Scheme are likely to entice potential buyers to the market, it is important to remember that the guarantee is for lenders to encourage greater availability of loans for buyers with small deposits.

He said: “It will, however, give more confidence to lenders that the government is supporting the market and unlikely to let house prices fall.

“This could encourage even greater availability of mortgages outside of this particular scheme, for customers with a diverse range of circumstances.”

Sign up to our daily email