Rishi Sunak has said the stamp duty holiday will be extended until the end of June. That means homebuyers in England and Northern Ireland will pay no stamp duty on properties worth up to £500,000. The extension will save an additional 300,000 home buyers up to £15,000, according to property website Rightmove.
An extension to the deadline was widely expected. But in a surprise move, the Chancellor also announced that stamp duty will be tapered after the holiday ends. The threshold will drop to £250,000 until the end of September before returning to its normal level of£125,000.
Tens of thousands of young people will get their first step on the housing ladder under a mortgage scheme due to be announced in the budget this week.
Buyers will be able to obtain a mortgage with a deposit of only 5 per cent of the value of a property under the plan to turn "generation rent" into "generation buy".
The Treasury will guarantee part of the loan to encourage banks to offer riskier mortgages on properties worth up to £600,000.
Rishi Sunak, the chancellor, will outline the scheme in the budget on Wednesday. He said: "Owning a home ia a dream for millions and we want to help as many people as possible".
Rishi Sunak is considering extending the stamp duty holiday until the end of June to boost the housing market, it has been reported.
Last July the Chancellor exempted most buyers from the levy if they completed sales before March31st, 2021 - saving them up to £15,000.
Now he is preparing to use next week's Budget to extend the holiday by another three months, The Times said.
The policy covers the sale of property worth up to £500,000 and would cost around £1 billion to implement. It comes amid concerns that not extending the holiday would create a cliff edge, jeopardising hundreds of thousands of sales.
Average house prices soared by 8.5% last year to hit an all time record of £252,000, figures show. it is the highest annual growth since October 2014, according to the Office for National Statistics.
UK property values went up by £20,000 in the year to December. All regions showed an increase but the biggest hike came in the North West, where average prices rose by 11.2 per cent to £184,000. London saw the smallest increase at 3.5 per cent and is still the most expensive part of the country with the average property worth £496,000.
Detached properties saw gains of 10 per cent as buyers searched for bigger properties in lockdown. But the value of flats and maisonettes also rose by 5 per cent.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: 'The housing market continued at full speed ahead as we approached the end of the year. With demand from buyers for more space - both inside and out - outstripping supply, prices inevitably edged upwards.' He added: 'Detached houses continue to be the property of choice, with growth of flats continuing to lag.'
The Chancellor is considering extending the stamp duty holiday for a short period according to a newspaper report.
The Daily Telegraph, quoting an unnamed government source, says Rishi Sunak may extend the March 31st deadline by six weeks to mid-May, to avoid tens of thousands of fall throughs and what it calls a "completion trap".
"It is certainly the case that a lot of people would be caught in the completion trap if the holiday were to end when it is due to" the source tells the Telegraph.
There is no mention of what would happen to buyers whose transactions are now underway but may not complete even by mid-May. Sunak has apparently dismissed calls for a longer, six month extension because of the damage that would do to tax receipts at a time when the government is seeking to recoup lost income.
Officially the government does not make fiscal announcements outside of major events such as the Budget, scheduled for March 3rd.
However, the Telegraph is closely aligned with government thinking and has given advance information on new policies in the recent past. The paper has also mounted a strident campaign in recent weeks in favour of an extension to the stamp duty holiday.
The government yesterday confirmed that another March 31st deadline - for buyers using the current Help to Buy equity loan scheme in England - would be extended.
Homes England, the government body presiding over the scheme, announced it would extend the deadline until May 31st for new build completion and purchase, to give buyers and house builders more time.