The stamp duty holiday’s conclusion could have a devastating effect on not just the property market, but the wider economy as well, according to Jeremy Leaf, north London estate agent and a former RICS residential chairman.
Leaf points to housing market sales, and the multiplier effect upon bricks, plumbers, electricians, roofers, decorators, and gardeners.
Moreover, many industry figures believe that borrowers are bringing forward their transactions, so those individuals that intended to purchase in 2021, are now buying in 2020 in order to qualify for the stamp duty holiday.
This will likely have a knock-on effect on transaction levels in 2021 as a result.
Leaf said: “One would hope the government’s aim is to generate more housing transactions at affordable prices but only the unforeseen consequences of the second COVID-19 wave and lenders in particular being overwhelmed by the strength of the demand has prompted these delays.”
Furthermore, research from Twentyci has revealed that many sales being agreed now will not go through before the stamp duty holiday comes to an end in March because of delays in processing times.
Leaf added: “So what do to? The chancellor could extend or taper the scheme to avoid a ‘cliff edge’ or perhaps more constructively leave the concession in place just for first-time buyers who are the lifeblood of the housing market. Either way, doing nothing is not an option.”