A survey of people currently purchasing property suggests almost a third may pull out if they look likely to miss the stamp duty holiday deadline.
The Guild of Property Professionals surveyed more than 1,000 buyers last week and 31% said they would ditch their potential purchase if completion takes them beyond 31 March, when the holiday is due to end.
While there are over 140,000 more people in the process of buying a new home now than this time last year and an estimated 418,000 homes sales progressing to completion according to Zoopla, with many having been prompted by the stamp duty holiday, there are growing concerns over plans for the re-introduction of stamp duty in April 2021.
There are mounting fears that tens of thousands of property sales could collapse, as buyers struggle to beat the deadline, owed in part to delays in the conveyancing process, after the government confirmed that it “does not plan” to extend the temporary relief offered to property buyers via the stamp duty holiday.
Iain McKenzie, CEO of The Guild of Property Professionals, commented: “If the deadline remains as it is, only a quarter of the sales agreed in January will complete in time. With 140,000 more people waiting to complete sales than this time last year, there will be a significant number of buyers who will have to find additional money for stamp duty if they have not budgeted for it.
“Our hope, and the hope of 71% of the public, was that the government was going to extend the stamp duty holiday, or at the very least, introduce a phasing out period that will ease the pressure on all parties involved, and will prevent a cliff edge.”
More than a third – 38% – said that stamp duty had a big financial impact on the amount they paid, while a further 46% said it had a medium impact on their finances.
The research also found the average value of the property people had bought or were going to buy was £232,500, meaning the average house buyer would face a stamp duty bill of £2,150.
With a third aiming to push through a move quickly to take advantage of the holiday, McKenzie warns many would not have budgeted for this added cost.
He added: “If buyers are unable to complete because of not having the stamp duty money in place, we will see a large number of transactions fall through as a result. In fact, our research showed 83% of those who had moved this year said they would have been likely to cancel or postpone their house move if they had to pay stamp duty, which would have been a disaster for the property industry getting back on its feet after the initial lockdown.
“The signs are there, the stamp duty holiday has been successful, but we need to ensure a smooth transition back to a normal service.”