Reports over the weekend suggested chancellor Rishi Sunak was considering a six-week extension to allow purchases to complete and avoid thousands of cases collapsing.
However, conveyancer O’Neill Patient said as no extension had been announced yet it was safer to assume the government’s deadline of 31 March will not be extended.
And even if one was forthcoming, it would provide little practical assistance to the industry to aid completions.
“If the government does extend by the mooted six weeks, we won’t know this until into March and, therefore, this does little to help the impending deadline and merely adds newer buyers into the race to beat the cut-off,” it said.
“The holiday was introduced to stimulate the market after the first Covid-19 lockdown last year and it has certainly achieved its aim, with the unexpected consequences.
“With the huge number of house sales going through the system, the industry is struggling to cope with this unprecedented demand,” it added.
The firm noted the pressure at the moment across the home buying industry was “immense” and being made even more intense with many firms short staffed from illness, home schooling challenges and people working from home.
Manage buyer expectations
Instead, O’Neill Patient said it was important to manage buyers’ expectations as the chance of completing transactions before the stamp duty holiday cut-off date for some buyers is slim, especially for those purchasing since the beginning of the year.
It has been quoting the stamp duty charge to new clients since the New Year to prepare them for the likelihood of needing to pay it.
Andy Scaife, CEO at ONP Group, said: “Some clients are understandably disappointed that they are likely to miss the stamp duty deadline.
“For some time now, we have been doing our best to manage buyers’ expectations by letting them know what the stamp duty charge will be if they cannot complete by 31 March.
“While we will try to do everything we can to complete as many of those transactions in our pipeline, it is better to know now rather than on the day of completion so at least they can try to make some preparations to cover the extra cost, should it arise.”
Phased to allow completions
These sentiments were shared by bridging industry trade body the Association of Short Term Lenders (ASTL), which agreed it could just result in more buyers flooding in.
It called for any extension to be phased to only allow extra time for cases to complete that were already in process.
ASTL CEO Vic Jannels said: “We are pleased that it seems the chancellor is listening to voices from the industry, including the ASTL, and considering providing breathing space for those transactions that are currently proceeding in a dramatic race against time.
“If there is an extension, it will provide peace of mind for many thousands of homebuyers and prevent the needless abortion of transactions, which would be bad for customers and bad for businesses.
“However, a note of caution – simply changing the cut-off date will not resolve the problem. There needs to be a phased transition and possibly an agreement that cases formally offered before the 31 March have additional time in which to complete.”