UK budget 2021: More Brits favour scrapping stamp duty

Lucy Harley-McKeown
·4 min read
LONDON, UNITED KINGDOM - 2021/02/22: Terraced houses in London as pressure grows on the Chancellor of exchequer, Rishi Sunak for the stamp duty holiday to be extended in the UK Budget, which will take place on on 3 March 2021. The stamp duty holiday, which was introduced on 8 July 2020, is due to come to an end on 31 March 2021. (Photo by Dinendra Haria/SOPA Images/LightRocket via Getty Images)
The stamp duty holiday is due to finish at the end of March, and there has been much discussion of the merits to extending it in Britain's next budget on Wednesday. Photo: Dinendra Haria/SOPA Images/LightRocket via Getty Images

The majority of homebuyers in the UK have said that they would like to see stamp duty cut for good, according to a survey.

Estate agents Ascend Properties found 79% of buyers would like to see stamp duty holiday extension, while 71% would like it scrapped altogether.

When broken down the figures show that more than half of those surveyed (51%) wanted an extension for the whole market, while 28% think it should be restricted to delayed sales having offers accepted before the original March deadline.

The study also found that while homebuyers would mostly like to see an extension, the stamp duty holiday hasn’t been the driving influence when it comes to their decision to buy.

There has been a stay on paying the archaic land tax for months now, as chancellor Rishi Sunak brought in sweeping measures to support the economy and housing market in the wake of the coronavirus.

The stamp duty holiday is ending this month, and there has been much discussion around extending it in Britain's next budget on Wednesday.

The current stamp duty holiday has helped to turbocharge homebuyer demand since it was introduced in July last year, suspending the tax paid on the first £500,000 ($697,620) of all property sales in England and Northern Ireland.

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Ascend asked if the original introduction of the stamp duty holiday had caused homebuyers to enter the market in search of a property. 52% stated it wasn’t the reason, with a further 36% saying they were already in the process of moving when it was introduced. However, for 12%, it did act as the catalyst for their current property purchase.

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Despite the long market delays caused by stamp duty fuelled buyer demand enveloping the market, 61% of buyers have managed to complete and save on stamp duty.

For those yet to complete, 34% were unfazed by an extension, stating they wanted to move anyway, but a saving would be nice if the deadline were extended. A quarter also said that delays on their purchase would cause them to miss the original deadline, so an extension would see them save.

However, for the other 40%, a potential extension could have a far more significant impact on their purchase.

20% stated their sale is likely to fall through if there isn’t an extension, with an additional 20% stating they would call off their current sale to look for a different property if more time is granted on the current stamp duty deadline.

Managing director of Ascend Properties, Ged McPartlin, said: “We can unequivocally say that a deadline extension will benefit more homebuyers should it materialise on Wednesday. At the same time, it’s also likely to exacerbate the current issues of extended purchasing times.

"While many would like to see it happen, a stamp duty saving isn’t the primary driving force behind the intent to purchase, so you have to question whether an extension is worth the many additional months of transactional delays that it is likely to cause."

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Meanwhile, some market-watchers have commented on how an extension to the stamp duty holiday could impact the greater market and the nation's house builders.

Suzi Gatward, Partner at law firm Charles Russell Speechlys, said if demand wavers in the housing market due to a lack of extension, "housebuilders and developers will not be able afford to build much-needed homes across all parts of the country."

"Extending the holiday would give a boost to the entire property sector, encouraging the continued growth of the housing market to keep the wheels turning in the industry," she continued.

"For a sector which has demonstrated resilience during periods of uncertainty over the last year, the extension would provide the much-needed support and confidence that the government is committed to building back to recovery.”

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