Extend stamp duty holiday to allow cladding victims to benefit too, Chancellor urged
Campaigners have urged the Government to extend the stamp duty holiday for the millions of homeowners trapped by the cladding scandal who are currently unable to sell their properties.
Almost 4.6 million homes are thought to have been caught out by the cladding crisis, according to the New Build Database, an analysis firm. Many of these are currently unsaleable due to lender requirements for external wall safety forms.
Flat owners face the possibility of having to pay punitive costs for cladding remediation works. They will also miss out on tax savings of up to £15,000 because they cannot move in time for the March 31 deadline.
Clive Betts, MP and chair of the Housing, Communities and Local Government Committee, said the situation was "outrageous" and "desperately unfair".
“Leaseholders not only have the potential costs of remediation works, they have lost the ability to benefit from the tax holiday," he said.
“It would be a positive step if anyone who couldn’t sell because of building safety works and could prove that they had tried to sell, could get an extension of the stamp duty holiday,” added Mr Betts. “That would be fair and reasonable.”
Lucie Gutfreund, of End Our Cladding Scandal, a campaign group, also called on Chancellor Rishi Sunak to exclude properties that are currently unable to get lending due to cladding from future stamp duty charges.
Homeowners “trapped in unsaleable limbo” are unfairly excluded from the stamp duty holiday “due to the Government’s inability to resolve the cladding situation,” said Ms Gutfreund.
Sebastian O’Kelly of the Leasehold Knowledge Partnership, a charity, said: “The Conservatives only have one housing policy: to increase private homeownership. But what is the point of encouraging a new generation to get on the property ladder when the previous generation that did so is facing utter ruin owing to the cladding and building safety scandals?”
One buyer intended to take advantage of the stamp duty holiday to buy a bigger property but was stymied by the cladding crisis. Mat Griffiths, 31, found a buyer for his two-bedroom flat in Brighton and had an offer accepted on another property.
But as the flat is in a block, his buyer's lender required an external wall safety (EWS1) form, which requires a surveyor to carry out checks. The demand for such tests is very high and there is a shortage of qualified people to carry them out, which means there is a large backlog.
The building has not yet secured an EWS1 form, and the delay means Mr Griffiths’ purchase has fallen through, so he has little hope of buying before March 31, and as such will lose out on a £15,000 stamp duty saving.
“It has been hardest on my fiancée, being trapped in the flat, being in limbo. Some weeks she cries every night,” said Mr Griffiths. “It is really disappointing.”
It comes as new data shows property transactions jumped by a third year-on-year in December as buyers rushed to complete ahead of the stamp duty deadline.
There were 137,200 residential transactions in Britain last month, according to HMRC’s provisional non-seasonally adjusted estimate. This was a 14pc jump on November and 34.2pc higher than in December 2019. It was the largest number of transactions in any December since 2006.
Lucian Cook, of Savills estate agents, said: “With the current lockdown causing further economic disruption and making it more difficult for some buyers to complete before the stamp duty holiday ends, arguably there is a stronger case to extend it and taper its withdrawal than there was for introducing it in the first place.”
Analysis by Knight Frank estate agents showed property transactions in the last three months of 2020 were up 19pc year-on-year.
This meant that, despite the spring housing market shutdown, overall sales volumes last year were down only 11pc compared to 2019. This was less than a third of the 43pc decline recorded in 2008 as the financial crisis took hold.
A government spokesperson said: “The aim of our stamp duty cut is to protect hundreds of thousands of jobs which rely on the property market through a time-limited stimulus to economic activity. As with all taxes we keep it under constant review.”
