Hundreds of thousands of home sales are at risk of missing the stamp duty holiday deadline unless urgent changes are brought in to ease pressure on the housing market, Irwin Mitchell has warned.
Zoopla recently reported that the backlog now numbers 420,000 buyers, totalling £112bn in sales, looking to complete before the stamp duty holiday ends on the 31 March.
October 2020 has seen agreed sales up 52% compared with the same month last year, with the peak in August saw a high of 62% above 2019 levels.
The stamp duty holiday means buyers could save up to £15,000 in tax – prompting many to bring their plans forward to take advantage.
Jeremy Raj, national head of residential property at Irwin Mitchell, said that the result has been an overstretched purchasing process, with some surveyors, mortgage lenders and conveyancers stretched beyond maximum capacity in some parts of the country.
He added that with Brexit on the horizon, the situation may get worse before it gets better.
Raj said: “The housing market rollercoaster has clearly got plenty more twists and turns left to unfold.
“We’ve gone from the most brutal and sudden shutdown that most of us can recall, to unprecedented levels of activity over the summer, and significant backlogs in many parts of the industry.
“The deadline of the end of the government’s [stamp duty] holiday is already looming.
“Lenders, surveyors, solicitors, managing agents and search providers are all struggling to keep up, particularly in some parts of the country.
“Added to the mix are huge economic uncertainty with the end of the furlough scheme, the local lockdown lottery, numerous industries on their knees and the potential Brexit fallout to come.”
There are also issues around so-called ‘cladding prisoners’, with millions stuck with leasehold homes being valued at nil by mortgage companies due to not having an EWS1 form.
Raj continued: “Many of our clients are either trapped in unsuitable properties at a point they would normally have been trading up or down, or unable to work, deal with children or cope with lockdown – because their homes no longer work for them.
“Some of the issues can’t and won’t be fixed quickly, but what is clear now is that people need as much certainty as possible, and encouragement that they will not be left high and dry if their circumstances change.
“The [stamp duty] holiday should be extended or the ending softened, the cladding issue properly addressed with real action now, and banks and other lenders need to be encouraged to play their part in restoring confidence in the market, with accessible products that will enable people to match their homes to the way their lives are now.”