The fact that they did meant we were not expecting any changes to be announced however the new Chancellor, Jeremy Hunt, did put a ‘time stamp’ on them and now they will be in place until the 31 March 2025 when they will revert back to the previous levels.
Some might wonder whether this is a ‘big deal’? After all, that deadline is over 28 months’ away and you might anticipate this gives everyone who wants to take advantage of these stamp duty savings ample time to have gone through the process.
However, and this is something conveyancing firms and indeed all property market stakeholders will be acutely aware of, stamp duty deadlines come with significant demands made of everyone involved in a transaction. Particularly as we move closer to that deadline and certainly when we reach a point where it becomes touch and go whether completion can be achieved by that date.
We have much experience of this over the last decade with multiple stamp duty giveaways and holidays being put in place, but it is never an easy period to work through and adds a level of distortion to the housing market that otherwise wouldn’t be there.
Stamp duty holiday could be required as purchase activity dips
Now, this is not to say that this stamp duty holiday – as it has now become – isn’t justified or warranted in the current environment. In that sense, there has been something of an interesting shift.
Many commentators – at the time – questioned whether the lifting of the stamp duty thresholds was needed and that it would simply heap more demand into the market. Demand that couldn’t be met given the supply-side imbalance. Now, with predictions of purchase activity being downgraded particularly next year, you might argue that a stamp duty holiday is required in order to bring in more demand.
Deadline timing adds ‘political dimension’
Of course, there is a political dimension to this – as always – and it comes in the form of the date of the deadline. There have been some accusations thrown at the Chancellor that he has effectively postponed some of the bigger decisions for the next government – whoever that might be.
Given 31 March 2025 will be after the next general election, there could be an element of this in play here. We will not only have had multiple Budgets and Autumn Statements between now and then, where decisions could be made and/or changed, but by March 2025, we will categorically have a new government and if it is a Labour one, then we are likely to have a fundamental shift from what is being announced right now.
From a conveyancing perspective, we do, of course, have some time here, but if history tells us anything, it’s that the closer we get to the deadline the more difficult the process will become. Firms have been under serious pressure for some time, for a whole variety of reasons particularly when it comes to retaining and securing staff to deal with business levels.
Few would argue with a measure which seeks to stimulate housing transactions at a time when there may be a number of headwinds working against this. However, in our view, permanent changes with no artificial deadlines tend to provide stability and certainty. It would have been preferable for our industry to have had this from the Budget rather than another stamp duty holiday – regardless of the length of time it will now be kept for.
