More than £3.4 billion could be lost in fees and commission to estate agents, lawyers and surveyors if people buying homes drop out of purchases because they cannot complete deals before the stamp duty holiday ends, research suggests.
One in five of the 457,358 purchases that were at the sold subject to contract stage at the end of last year, or more than 91,400, are expected to fall through if the chancellor sticks to the deadline of March 31, according to Twentyci, a property analyst. A further 31,250 of the 125,000 sales agreed this month could be abandoned.
These lost sales threaten to deliver a blow to the wider economy, the analysis warns. Professionals in the property industry would take a hit to their fees, while retail sales would suffer a £368 million blow from the loss of purchases associated with moving house, such as furniture.
The property industry has been lobbying the government to extend the stamp duty holiday in the budget on March 3 because of the boost it has given to the market and concerns that delays in conveyancing mean that many purchases will not be completed before the March 31 deadline.
The threshold for paying stamp duty was raised temporarily from £125,000 to £500,000 in England and Northern Ireland last July by Rishi Sunak. The move saves buyers up to £15,000 per sale. There are concerns at the Treasury that the change has led to sharp rises in house prices and has put property out of reach of first-time buyers. According to figures from the Office of National Statistics last week, prices are up 7.6 per cent from a year ago, the highest annual growth since 2016.
Mark Hayward, chief policy adviser of Propertymark, which represents property professionals, said that 69 per cent of estate agents “are expecting to see an increase in failed sales due to buyers realising their sales will not complete ahead of the deadline”.
Twentyci estimates that 325,000 of the sales agreed between September and the end of December will miss the deadline. While many will continue, a fifth are expected to be abandoned.-
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