Government must act now to stop homebuyers facing a cliff edge in March

3-2-2021

With thousands of property sales at risk of falling through unless the stamp duty holiday is extended and the building of new homes across the UK being delayed due to the current lockdown, the government is being urged to step in and rescue two of its property incentives if homebuyers are not to face a cliff edge at the end of March. “There are two government incentives which face a cliff edge – the Help to Buy scheme and stamp duty relief which end or change significantly at the end of March,” said Heather Powell, a partner and head of property at tax and advisory firm Blick Rothenberg. The Help to Buy scheme, which was due to end on 28 February, has already been extended until up to 31 March. It will then, assuming no further extensions, be replaced in April by a new scheme with slightly altered requirements. But there is still no clarity about any changes to the stamp duty holiday – if any are being planned by the government. Jesse Norman, a treasury minister, speaking on behalf of the government during Monday’s stamp debate, was not permitted to comment on tax policy outside of a fiscal event. This, he said, meant he could not say whether or not the government was considering extending the holiday – stating that people would have to wait until the Budget announcement on 3 March to learn more. Rishi Sunak Some reports suggest that the chancellor Rishi Sunak is considering an extension to the existing stamp duty break, while others claim that it will end on 31 March. Either way, the uncertainty leaves many buyers facing a potential “cliff edge at the end of March”, according to Powell. Heather said: “Buyers who will not be eligible for “Help to Buy” from 1 April 2021, will have to find alternative financing for the home they reserved many months ago. “When the loss of the stamp duty relief is added in, which could add up to £15,000 to the cash they need to find, many may lose the home [they are attempting to buy] simply as a result of businesses and individuals complying with the government rules on self-isolation.” She added: “The government needs to step in and agree that all buyers in this position that are currently eligible for the Help to Buy support and the stamp duty relief – even if their purchase completes after 1 April 2021, giving peace of mind to all buyers.”

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