He always swore it would end on March 31 this year and indeed, Rishi Sunak looks even more determined in his vow to bring the Stamp Duty Holiday (SDH) to a close on March 31. This is despite the pleas of estate agents and others in the property industry.

In his reasoning, the Chancellor points to both a strong housing market and annual house price growth of 7.6%. Both indicate to him that he’s managed to keep the property market afloat during the pandemic and that it is now time to concentrate on ‘more needy’ sectors.

Certainly, the policy where buyers saved £15,000 on the first £500,000 of a new home, seems to have worked – to an extent. As well as ensuring the property market remained buoyant, it has also saved a number of jobs in the industry. 

First-time buyers lose out again

What it hasn’t achieved though, is to help first-time buyers get on the market. Deposits of 20% were tough enough to secure before prices started to rise. New HM Revenue & Customs figures to November last year show the 7.6% house price rise was the highest since June 2016 and now brings the average UK property to a value of around £250,000. 

The end of the SDH may also see up to 100,000 property transactions fall through if they don’t make the March deadline. Sunak, though, is believed to be focusing his May 3 budget on other priorities, such as the hospitality and leisure industries where there has been high unemployment as a result of the pandemic.

Estate agents already noticing fall in buyers

A spokesperson for NAEA (National Association of Estate Agents) Propertymark said its members had noted a large fall in prospective buyers from 580 to 348 between November and December last year. It expects that number to fall even further in January with the SDH deadline getting ever-closer. 

“While we would ordinarily expect to see a lull over the festive period, these numbers show that the tightening of lockdown restrictions, coupled with the reality that many individuals would no longer meet the stamp duty deadline, has exacerbated this,” he said.

Prime London property plummets

One area to have suffered in particular during the series of UK lockdowns is prime London property – an area where saving £15,000 is a mere drop in the ocean for wealthier buyers. In some high-end postcodes prices have even plummeted as much as 40% (Mayfair), while St James’s doesn’t fare much better. 

The reason for the drop in prices has been ascribed to the lack of foreign buyers since the pandemic struck. International property analysts believe that the situation may well right itself once travel restrictions have been lifted, as the reduced prices will be too tempting for many wealthy overseas buyers to resist. This is despite the 2% surcharge they will have to pay after  April 1.

Meanwhile, other less-affluent-but-still-expensive areas of the capital have fared better. The price of property sold in Chelsea, for instance, has gone up by 23% since the start of the pandemic.