Experts Call For Urgent Clarity On Stamp Duty Holiday And Cladding Issues To Ease Pressure
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, experts warn.
New research from Zoopla reported that the backlog now numbers 420,000 buyers totalling £112bn in sales looking to complete before the stamp duty holiday ends on the 31st March, creating huge pressure on the system.
October 2020 has seen agreed sales up 52% more than in the same month last year, with the peak in August saw a high of 62% above 2019 levels.
The stamp duty holiday, which was announced in May this year, means buyers could save up to £15,000 in tax – prompting many to bring their plans forward by months or even years to take advantage of the savings.
The result has been a completely overstretched purchasing process, with some surveyors, mortgage lenders and conveyancers stretched beyond maximum capacity in some parts of the country. Experts at leading national law firm Irwin Mitchell say with Brexit looming on the horizon, the situation may get worse before it gets better.
Expert Opinion“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 SDLT 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.” Jeremy Raj - Partner
The stamp duty holiday didn’t have the intended effect on the lending market, where banks tightened their criteria and asked for higher deposits to be provided - cutting off many first-time buyers from the market and creating a break in the chain.
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 in place confirming the building’s cladding is safe.
Specialist residential property experts say change is needed, and quickly, to make sure the thousands of buyers can make sure they don’t miss out.
Jeremy 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 SDLT 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.”