Sunak under pressure to extend stamp duty holiday as tax break sparks housing market boom
Housing transactions boomed at the end of last year driven by buyers rushing to complete deals before the stamp duty holiday deadline, putting pressure on government to extend the tax break.
UK residential transactions in December were 31.5 per cent higher than the previous year, and jumped 13.1 per cent compared to November, buoyed by the chancellor’s decision to cut property tax.
As part of a package of coronavirus stimulus measures, the government in July increased the nil rate band for stamp duty to £500,000.
Rishi Sunak is facing pressure ahead of March’s budget to extend the tax break – which is due to end on 31 March – to maintain the UK housing market’s momentum during the final months of the pandemic.
Andrew Montlake, managing director at mortgage broker Coreco, said: “Many people are banking on the chancellor caving into pressure and extending the deadline, but for now activity levels in the property and mortgage market are nothing short of frantic”.
However, despite the uplift in transactions at the end of the year the provisional UK residential transactions between April and December 2020 were the lowest since 2013 due to the wider economic impact of the Covid-19 crisis.
The property market was closed between March and the end of May, meaning the second quarter of the year recorded the lowest quarterly transactions since the first three months of 2009.
Guy Gittens, managing director of London estate agent Chestertons, said: “2020 really has been a year of ups and downs for everyone in the country, but it ended on a high for the London property market.
“With plenty of properties on the market and plenty of buyers still highly motivated to move, we expect this strong market to continue through to the spring.
“What happens after then will really depend on how quickly we can emerge from the shadows of the coronavirus crisis and start on the path of economic recovery.”