Landlords could be among those who benefit from a rumoured extension to the stamp duty holiday until the end of June.
The Times newspaper said it has been told that Chancellor Rishi Sunak will use his Budget on March 3 to move the stamp duty deadline from March 31 to June 30.
But experts warned a three-month extension would simply create another “cliff edge” for the housing market with a huge backlog of sales meaning new buyers are likely to miss out on the June deadline.
Buyers were also warned that the rise in house prices triggered in part by the stamp duty holiday could be outweighing the stamp duty savings that some buyers are making.
The “nil rate” stamp duty threshold was temporarily raised from £125,000 to £500,000 last July in England and Northern Ireland, which was set to run until the end of March.
Rightmove estimates that 100,000 buyers who agreed a purchase last year are set to lose out, if the deadline remains at March 31.
Estate agents and other property professionals gave a cautious welcome to the extension but warned a tapered end to the stamp duty holiday could prevent a “cliff edge” scenario.
Tim Bannister, a property expert at Rightmove, said: “We estimate that around 100,000 sales will miss the current March deadline, and so, if the holiday is extended to the end of June, it would give these the chance to complete in time, plus a number of other sales could now make it through that were only agreed at the start of this year.
“If it is announced next week, we’re likely to see a rush of new buyers also trying to make use of the savings.
“But it’s worth remembering that the huge log jam will mean a new sale being agreed is still likely to take over four months on average to complete, so really an extension for a few months would be an indication that it’s to help those already trying to get their purchases through.”
Richard Donnell, research and insight director at Zoopla, said a potential extension would support sales agreed in January “that had little more than a 50% chance of benefiting from the relief, and will bring a further tranche of buyers into the market in the immediate term”.
He added: “While this will inject a new wave of impetus into the market, drawing in new buyers until Easter, the Chancellor hasn’t resolved the cliff edge that the market will face at the end of June, when the new deadline comes into play.”
Mark Hayward, chief policy adviser, Propertymark said speculation that the holiday will be extended “is good news for the property sector”.
“However, extending the holiday until June will create another cliff edge,” he warned.
“We know from our own research that the majority of estate agents expect to see an increase in the number of failed sales if the stamp duty holiday ends at a cliff edge, so we need Government to consider a tapered end to the holiday so that buyers aren’t forced to pull out at the last minute and the property market can continue to thrive.”
Rightmove estimates around 628,000 sales are currently in the legal process across Britain as buyers rush to beat the stamp duty deadline.
According to Halifax, house prices jumped by £57,000 across England and Wales in the second half of last year.
A Treasury spokesman said the department could not speculate on tax ahead of fiscal events.
