Twenty7Tec survey: Should The Chancellor extend the 30th June stamp duty relief deadline?
Two thirds of brokers say they would extend the deadline.
[25 June 2021, London] On Monday 21 June, the UK’s leading mortgagetech company, Twenty7Tec, surveyed its 14,000 broker clients: “If you were offered a three month extension to the stamp duty holiday, would you take it?” We also asked them to explain the reasons behind their vote.
The results were as follows:
Definitely not 13.87%
Probably not 15.61%
Of those who expressed an opinion, 66.43% said yes to the extension and 33.57% said no.
One in two of all respondents said that they would ‘absolutely’ extend the scheme.
What could the deadline extension mean for brokers?
James Tucker, CEO and founder of Twenty7Tec said of the results:
“The survey shows a significant majority of brokers voting yes to extending the stamp duty holiday. They know that the tax relief has kept them busy over recent months, and the vast majority are keen for it to remain that way.
“However, a good number of the respondents who were opposed to extending the relief named a need to return to normal workloads for themselves and solicitors as the main rationale. Brokers using Twenty7Tec’s platform save one-third of their time researching and applying for mortgages versus more outdated methods. That’s a huge efficiency gain that has enabled the market to keep moving over recent months.
“As of 1 July, the £250k-£500k relief disappears, and we believe that this will have some effect on the market. Looking at our figures, the proportion of ESIS mortgage documents that are produced for buy to let mortgages under £250k is higher than it is in the £250-£500k bracket. So the relief which remains available is more likely to be of interest to landlords, first time buyers and properties outside the South East.
“Equally, we understand that house prices have risen 9.5% since the tax holiday was introduced, although there are now reports that prices might drop by up to 5% if the stamp duty relief deadline is not extended.”
Niki Cooke, head of intermediaries at Twenty7Tec says:
“I’ve spoken to leaders at brokers and intermediaries over recent days on this topic. Beyond the headline statistics, there’s a real split in brokers’ opinion about whether to extend and why. Was the tax relief programme a success? Well it definitely kept the market moving in what were challenging circumstances. But brokers are now asking the biggest of questions: ‘Should we have stamp duty tax at all for average priced houses?’ and ‘How do we make sure that we treat people fairly who would otherwise miss the June 30 deadline?’ Those are the challenges for the Chancellor over coming days.”
The Yes group
The Yeses explained that they had voted yes in order:
- To relieve pressure on solicitors
- To free up the backlog in removals firms
- To keep the market buoyant/great for home buyers
Selected comments from those who vote Yes to an extension:
- “Why pay tax when you don’t have to?”
- “It is stimulating the economy at a very difficult time and it is stimulating the property market to save people money.”
- “As I’m buying a property myself at the moment and due to delays in searches etc, I will fall outside of the current stamp duty holiday”
- “Stamp duty needs urgent reform anyway, removal below £500k is a good start. Clients battling to complete before the stamp duty with lenders flooded and unable to help”
- “It’s only fair with the Lockdown situation being extended”
- “It would put less pressure on the offers that have been issued that may miss the deadline.”
But some Yeses also advised caution too, explaining that they voted Yes:
- “To help those clients that for various reasons may miss out.”
- “An extension for cases already in the pipeline, but no new applications.”
- “Yes because of the backlog of applications the 30th June caused, but I would set a final date to take applications to still get to completion before the new proposed date.”
- “It would take the pressure off current cases BUT equally we would need to stop the current ongoing time pressure it creates for buyers. However, never look a gift horse in the mouth!”
- “Solicitors are taking so long to address the legal work, with so many still working remotely in their own timeframes”
- “There is obviously going to be a disproportionate effect on some parts of the country”
The No group
The ‘No’ group on why they would chose not to extend the stamp duty deadline:
- The market really needs to stabilise with lenders getting back to normal and taking the pressure off solicitors
- It should either be changed for good or left alone
- We need a normal buying situation again
- Caused short term demand / inflation which will inevitably drop once it’s over
Selected comments from those who voted ‘No’ to an extension:
- “All it’s doing is artificially pushing prices up which will crash, leaving thousands in negative equity”
- “The market really needs to stabilise, with lenders getting back to normal turnarounds”
- “There needs to be a normal house buying situation again. The Stamp Duty holiday has been great to stimulate the housing market again, but has also caused chaos with local searches taking months to come back and solicitors unable to cope with business levels.”