Last week’s Budget saw the government extend the stamp duty holiday until the end of June, as well as launch a new Help to Buy mortgage guarantee scheme.
While I backed an extension to stamp duty relief, I’m nonplussed why the government didn’t limit the extension to buyers already in the process of buying a house. In my opinion it should have been just for those who secured a mortgage offer by a certain date, or passed some other milestone prior to completing the purchase.
The main reason to extend the holiday, as far as I saw it, was to avoid angering the public and to prevent transactions from falling through, which could happen if people miss the completion deadline through no fault of their own and end up having to pay an unexpectedly hefty stamp duty bill.
Now however the government has simply delayed the cliff-edge from happening for three months, and in the run up it will be under pressure to extend the tax again.
For me the ‘tapered’ approach, where there will be no stamp duty up to £250,000 from July to September, doesn’t have much of an impact, as there’s still a huge difference between not paying tax on the first £250,000 and £500,000.
I don’t feel as critical of the Help to Buy announcement, which seems an example of Prime Minister Boris Johnson attempting to please younger voters.
The availability of high LTV mortgages has been poor since the pandemic, so this scheme is one way to return things to the way they were.
I’m relieved affordability requirements won’t be sidestepped, as was rumoured last year, as we still need to remember the lessons from the Global Financial Crisis and ensure financial institutions lend responsibly.
Another topic that’s worth a mention is cladding, as it seems a bit disappointing the government didn’t announce more funding to remove unsafe cladding. I think this is something that really needs to be resolved quickly, so we can all move on from Grenfell.
On a positive note, landlords will be pleased no announcement was made on Capital Gains Tax.
I always did think hiking the tax considerably seemed a very un-Tory like move – but maybe the government is simply delaying this move until we’re out of these choppy waters economically speaking. I guess we’ll see.
Ryan Bembridge, Editor, PropertyWire
