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Stamp Duty Holiday - broker warns most lenders won’t make deadline

A leading mortgage broker is warning that over half the lenders in a key segment of the market are already unable to make the March 31 stamp duty holiday deadline.

Mortgages for Business deals chiefly with buy to let mortgages for landlords, a key part of the transaction surge in recent months.

It says that 53 per cent of BTL lenders couldn’t make the deadline, and only 47 per cent could - but even their efforts could be frustrated by delays in other parts of a deal.

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As an example, Mortgages for Business says it recently undertook a search which took no less than 145 days to complete. And it says some larger mortgage lenders are so busy it takes them 10 minutes or more even to pick up a sales call from a new client.

The Mortgages for Business alert comes just as MPs prepare to debate a petition calling for the SDLT holiday to be extended, to avoid the much-publicised ‘cliff edge’ deadline of March 31. 

Jeni Browne, director of Mortgages for Business says: “Typically, a landlord would want about 100 days to complete a purchase. Clearly, landlords don’t have that sort of time on their hands any more and I’d urge them to do everything they can to push through a new buy to let purchase before the stamp duty holiday ends.  

“Top of their priority list should be picking the right lender. If landlords go to the wrong one, their transaction is bound to take too long.  That could leave them either out of pocket or, in certain circumstances, unable to continue with the purchase, if they don’t have the funds to pay stamp duty as well as the buy to let surcharge.”

She continues: “This is, potentially, a big saving for landlords and that’s one of the reasons that the Chancellor's temporary relief on stamp duty has fuelled a mini-boom in the housing market. As a result, I think most landlords would be completely gutted to miss the deadline simply because the lender they’d chosen couldn’t turn their transaction around in time.  

“With volumes so high, many lenders’ service levels have slipped - it’s taking some of the big players 10 minutes just to pick up a sales call while others are taking 35 working days just to undertake their processing … Frankly, it’s absolutely to the wire, even with the right lender.  

“Surveyors can’t operate at full capacity given all the preparation for a valuation they have to undertake to be Covid-19 compliant and that’s slowing transactions.  Even if the lenders and the surveyors come through, you might get unlucky with your local authority - one search we undertook recently, took up to 145 days to complete.”

* The Scottish Parliament yesterday rejected any extension to the similar holiday given to that country's version of stamp duty - Land and Buildings Transaction Tax. Daryl McIntosh, strategic development manager for Propertymark, says: "By not extending the LBTT holiday deadline beyond the 31st March as well as demonstrating a reluctance to redraw LBTT rates and bands, they have wasted the opportunity to help the market continue its recovery. Whilst it is welcome that the first time buyer relief will continue, it is a disappointing the Scottish Government were not more ambitious."

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