Property sales worth billions are at risk over cliff-edge when stamp duty holiday ends, MPs warn
- MPs have warned thousands of house sales at risk when stamp duty holiday ends
- Cross-party debate heard billions of pounds risked unless tax cut was extended
- Homebuyers now face anxious wait for Rishi Sunak’s March 3 Budget
Hundreds of thousands of house moves could collapse if the stamp duty holiday ends next month, MPs warned last night.
A cross-party debate heard that transactions worth billions of pounds were at risk unless the tax cut was extended, with some deals already falling through.
But a Treasury minister appeared to suggest the March 31 deadline would remain, saying the rise in the threshold to £500,000 was a temporary measure to kickstart the market last summer.
It means homebuyers will have an anxious wait until the March 3 Budget when Chancellor Rishi Sunak will announce whether or not the relief will be extended.
Hundreds of thousands of house moves could collapse if the stamp duty holiday ends next month, MPs warned last night. Homebuyers will have an anxious wait until the March 3 Budget when Chancellor Rishi Sunak (pictured) will announce whether or not the relief will be extended
Tory MP Elliot Colburn told the debate, held after more than 100,000 people signed an e-petition for an extension: ‘The stamp duty holiday was enormously welcome and helped to keep fluidity in the housing market even during the pandemic.
‘However, this has had a number of consequences and led to a situation where many like those petitioners could face losing out on this holiday, and face a hefty tax bill that they cannot afford at the end because their sales will not complete by the March 31.’
He quoted ‘alarming’ estimates from mortgage lender Paragon that almost two thirds of buyers nationwide, representing sales worth £1.5billion, are in a chain where someone is dependent on completion by the end of next month.
Mr Colburn said Paragon figures suggested 24 per cent of buyers would be unlikely to continue with their purchase if they missed out on the stamp duty relief and are instead landed with added costs of up to £15,000.
A cross-party debate heard that transactions worth billions of pounds were at risk unless the tax cut was extended, with some deals already falling through (file image of For Sale signs)
He concluded: ‘I would argue that a phased and tapered winding-down of the relief would probably be the most preferable option.’
Fellow Tory MP Greg Smith said: ‘The property market is now facing a cliff edge with a holiday ending on March 31, and this will have a devastating impact on the residential property market with it likely to stall at a time when it really should be at its busiest.’
Abena Oppong-Asare, a Labour Treasury spokesman, said: ‘This seems to be another example of the Chancellor’s short-term, stop-start approach throughout the crisis.
‘The stamp duty relief stoked the market, causing demand for home-buying services to far outstrip capacity, which now looks set to be followed by a crash of many people’s sales.’
Hiking fuel duty by 2p a litre would add £1.10 to the cost of filling an average 55-litre car. Fuel duty has been 57.95p a litre since 2011 (file image of an estate agents in London on January 25, 2021)
Jesse Norman, Financial Secretary to the Treasury, said: ‘It was the time-limited aspect of the measure which drove increased demand, which is exactly why the end date of March this year was announced, when the policy itself was first introduced.’
Mr Sunak is also said to be considering ending the decade-long freeze on fuel duty. Some in the Northern Research Group of Tory MPs in former ‘Red Wall’ Labour seats have concluded a 1p to 2p rise in fuel duty would be ‘bearable’ if it helped pump investment into left-behind areas, according to a report in the Daily Telegraph.
But Tory backbencher Robert Halfon said: ‘At a time when those on lower incomes are struggling financially, a fuel duty increase would level down. Far from building back better it would damage the foundations of economic recovery.’
Hiking fuel duty by 2p a litre would add £1.10 to the cost of filling an average 55-litre car. Fuel duty has been 57.95p a litre since 2011.
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