Chancellor's double boost for home buyers in the Budget
Home buyers got a double boost in today's Budget with the stamp duty holiday being extended by three months and the "nil rate" doubling to £250,000.
Chancellor Rishi Sunak took the action to help uncork the conveyancing logjam in the booming property market - a decision the Lancashire Post has been campaigning for.
As widely predicted the stamp duty holiday will now continue until June 30 from the original deadline of March 31.
And when the tax is reinstated, the "nil rate" of £125,000 will increase to twice that meaning buyers will not have to pay the duty on anything up to £250,000.
Estate agents, who are already experiencing an unprecedented demand from people trying to buy and sell, have welcomed the news of an extension to the holiday.
Tracy Phillips, whose business at Standish covers the Chorley area, said: "I have been an estate agent for 30 years and I have never known it quite like this. The prices people are willing to pay are crazy right now.
"I can't be unhappy, I suppose, because this is my job. But the extension of the holiday is going to make us even busier and, so too, the increase in the nil rate.
"My only slight concern is that with what we are seeing with prices, is it going to create a crash at a later date. We are riding the crest of a wave right now, but eventually that wave will break.
"Maybe I'm being a bit pessimistic, but there has to be an end point. We don't mind a slow down, but we don't want a crash."
The extension of the stamp duty freeze had been widely forecast by property experts after pressure on the Chancellor not to slam the door shut on March 31 on purchases already going through the conveyance process.
It had been predicted that as many as 300,000 sales could fall through with buyers pulling out at the last minute when faced with a bill of up to £15,000 on duty they hadn't budgeted for.
Some critics still feel that moving the deadline to June 30 is just "kicking the can down the road," with another cliff edge approaching three months on.
The call for a tapered system, where deals already in the pipeline could be concluded tax-free, appears to have been ignored by the Chancellor. The housing market is now expecting more new buyers to join the queue with a June 30 deadline now within reach.
In Lancashire the normal time for conveyancing before the stamp duty scramble was eight to 10 weeks. Now experts are saying it is 12 to 16 weeks and possibly even longer.
Linda Kirk, director of Lancashire conveyancing specialist Adkirk Law, said: “We are seeing high levels of sales with the benefits of the stamp duty holiday and now our clients can see through the process that was started with the clarity that the duty will be exempt.
“A lot of people could have been left with a hefty tax bill they hadn’t planned for if the deadline wasn’t extended because of delays beyond their control. With the current pandemic, we have all been operating in a restricted way and against difficult deadlines.
“We still have a pent-up pipeline of sales and deals, but this will allow everyone the time to plan ahead and with more surety.”
She also welcomed the Mortgage Guarantee scheme for first-time buyers which gives them the opportunity to buy their own home backed by major banks and building societies with up to 95 per cent mortgages.
“Many lenders have been asking for increasing levels of deposits so many first-time buyers have found it difficult. This will also help stimulate the economy and brings in a new kind of buyer into the market as long as lenders are committed to it."