The road ahead

While the temporary stamp duty holiday may have revived the housing market – which had been hammered by the pandemic – there has been no consequent increase in the number of solicitors, conveyancers, surveyors and estate agents required to do the grunt work.

In a normal market, according to figures released by Zoopla, almost half of sales agreed in January won’t complete by the end of March, so unless you set the ball rolling this side of the new year, you could end up paying significantly more for your new home. Even then you are cutting it fine, as the number of homes in the sales pipeline is currently 50% higher than it was at this point in 2019. That’s putting increased pressure on those tasked with the associated admin and will likely lead to extended processing times, as well as coping with the fact that a lot of businesses are playing catch up from being closed in lockdown.

It is not surprising, then, that 14 trade bodies have written to the Chancellor, requesting an extension to the stamp duty deadline. What effect it might have remains to be seen. However, when North Durham Labour MP Kevan Jones asked what assessment the Chancellor had made with regards to extending the benefit, the Financial Secretary to the Treasury Jesse Norman made clear that “the government does not plan to extend this relief and will continue to monitor the property market”.

Read between the lines, and that is not an outright ‘no’ – and situations beyond the government’s control may yet force its hand. The first three months of 2021 will see it dealing with the end of the Brexit transition phase, the deepest recession since records began, unemployment approaching 5%, and the logistics of distributing one or more novel coronavirus vaccines. It is going to need to keep the money moving if it doesn’t want the economy to seize up.

The Eurozone is attempting to achieve a similar result through negative interest rates, effectively penalising savers for hoarding cash to the tune of 0.5% per annum. Doing the same on a national scale – where the party in power could be accused of encouraging reckless spending after years of promoting the ‘virtues’ of austerity – may be politically unattractive, even with interest rates set independently by the Bank of England’s Monetary Policy Committee. There may be considerable pressure on the government to formulate an alternative that would make such a move unnecessary.

That alternative could well be a further shot in the arm for the property market. After all, the stamp duty holiday has already proved itself both successful and popular.

Our obsession with owning property has often been nicknamed the English disease – not only at home, but abroad. In the first half of 2021, the ‘disease’ could be reinvented as a cure for what ails not only England, but the wider British economy. That will only be possible if the government takes a pragmatic approach when reviewing the threshold at which stamp duty kicks in.