Chancellor Rishi Sunak has confirmed a three-month extension to the stamp duty holiday.
Sunak announced that the current stamp duty holiday has been extended until June 30 in the Budget today (March 3).
The nil rate band will then be set at £250,000 until the end of September when it will return to £125,000.
Sunak said:“The cut in stamp duty I announced last summer has helped hundreds of thousands of people buy a home and supported the economy at a critical time.
"But due to the sheer volume of transactions we’re seeing, many new purchases won’t complete in time for the end of March.
"So I can announce today the £500,000 nil rate band will not end on the 31st of March. It will end on the 30th of June.”
“Then, to smooth the transition back to normal, the nil rate band will be £250,000, double its standard level until the end of September.
"And we will only return to the usual level of £125,000 from October the 1st.”
The residential stamp duty threshold was raised from £125,000 to £500,000 in July to “catalyse the housing market and boost confidence”, according to the Chancellor's summer statement.
The tax relief was originally due to end on March 31.
Rob Clifford, chief executive officer of Stonebridge Group, commented: “The news about the stamp duty extension was widely trailed in the media last week, and therefore this three-month extension is not a surprise but a welcome and sensible intervention.
"Clearly, it will help some purchasers continue with their SDLT-free transaction, who might ordinarily have struggled to comply with the 31st March deadline. There is a risk that that this might act as the catalyst for a further spike in new purchases case which now attempt to complete before this new deadline, which the market needs to consider."
The extension comes after numerous calls for the stamp duty holiday to be extended. Last month MPs discussed a petition to extend the tax break that had garnered more than 130,000 signatures.
A February survey of more than 1,600 respondents by Rightmove found that one in five (21 per cent) were worried they would not complete in time to make use of the stamp duty holiday if it did come to an end on March 31.
One in six (16 per cent) said they were likely to pull out of the sale if they did not complete in time to make use of the stamp duty savings.
Nevertheless the housing market has remained strong. Nationwide reported 6.9 per cent annual house price growth in February after growth had slowed to 6.4 per cent for the first time in six months in January.
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