Budget 21: Nil band extension will ease market back to normality

Jake Carter

March 3, 2021

The stamp duty nil band will be extended to £250,000 from July to the end of September will ease the market back into normality, according to Robin Fieth, chief executive of the Building Societies Association.

During the Budget, Chancellor Rishi Sunak (pictured) detailed plans to rise the stamp duty nil band to £250,000 following the new stamp duty holiday deadline.

Fieth said: “We welcome recognition of the adverse effect that a future cliff-edge would have had with the announcement that the stamp duty nil band will be [extended].

“The government has not kicked the can down the road, but announced a plan to help to ease the market in England back to normality, we hope that the devolved nations will take a similar approach.”

Fieth also went on to say that it is good the Chancellor is recognising the adverse impact that an abrupt 31 March end to the stamp duty reduction would have had on the housing market and homebuyers.

He added: “We welcome the three-month extension announced today, which will give certainty to those who have already agreed home purchases or are near to doing so and continue the economic benefits of a fully functioning housing market.

“Our hope is that it can do so without related price inflation.”

Looking to the Mortgage Guarantee Scheme, Fieth believes the Chancellor has identified the difficulties faced by many, especially young people, who struggle to save a deposit to buy a home.

He said: “The government-backed guarantee for those who have just a 5% deposit is welcome news and this scheme will run alongside private sector solutions to the low deposit problem.

“A number of building societies have already re-entered the 90% to 95% mortgage market in past months and demand is likely to remain high.”

On the review of the bank surcharge, Fieth said: “We look forward to the review of the 8% bank surcharge which is paid by the largest building societies in the UK, in addition to banks.

“The recognition of the value delivered by the banking industry and the need to tax it fairly was positive in tone and intent both of which were welcome.”

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