🏡 Policy Shockwave: The Stamp Duty Holiday

Friday 20th November 2020

The Stamp Duty Rush – Great for Buyers, a Logistical Nightmare for Builders
The Office for National Statistics (ONS) confirmed on November 20, 2020, that UK house price growth had surged to a 4-year high, hitting 7.6% annually, driven primarily by the Stamp Duty Land Tax (SDLT) holiday introduced in July.

We here at Robbins Construction Ltd were thrilled to see the housing market roaring back to life after the initial 2020 lockdown freeze. The government’s decision to temporarily lift the SDLT threshold up to £500,000 did exactly what it was meant to do: it unleashed incredible demand.

The phone didn't stop ringing. Everyone who had been putting off an extension, a major refurbishment, or a loft conversion suddenly wanted to move, buy, and build—all at once. This created an immediate, two-fold issue for firms like ours:

Demand Overload: Our pipeline went from empty to overflowing in weeks. While great for business stability, it meant we had to turn down good work or push start dates far into the future, impacting client expectations on Timeline.

The Materials Pre-Shock: This massive, sudden domestic demand (the Repair, Maintenance, and Improvement, or RMI sector was booming) served as the pre-cursor to the material price crisis. We were suddenly competing with every housebuilder and refurb firm in the country for key stock, even before the global supply chain really locked up.

Our Opinion: It was a brilliant, necessary fiscal tool to protect the economy, but it was like opening the floodgates without checking if the drainage system could cope. The unintended consequence was that it contributed to a massive backlog that fuelled the next major crisis: inflation.

Debate Point: Should the government have introduced the SDLT holiday with a staggered completion window (e.g., linked to planning permission status) rather than a single, hard deadline, to allow the construction supply chain time to adapt?