Mortgage Application Backlog And Stamp Duty Holiday Concerns
With concerns up to 325,000 buyers might miss out on the stamp duty holiday due to backlogs in the market, there is a growing demand for an extension or further support to be issued to buyers.
Dominik Lipnicki, of advisers Your Mortgage Decisions, said: “Lenders appear to be worried about just how fragile the property market really is and if the current crisis will result in house price falls. We have seen a post-lockdown boost, aided by Rishi Sunak’s stamp duty scheme but many agree this may well have been a temporary recovery with darker times ahead.”
A spokesman for banking body UK Finance said: “Rates offered will be influenced by several factors including the lender’s funding and operating costs, risk appetite and provision for any potential losses over the life of the loan.”
Concerns about people missing out on the stamp duty holiday have led many property market specialists to call for it to be extended. This has led many key property industry people and bodies to sign an open letter to the Government, asking for an extension.
Signatories of the letter include:
- British Association of Removers
- NAEA Propertymark
- The Guild of Property Professionals
- Residential Property Surveyors Association
- Conveyancing Association
- Society of Licenced Conveyancers
- Kate Faulkner
- House Buying and Selling Group
The letter details the significant pressure placed on the housing market because of the holiday, and how the industry is already feeling under the strain as of late October 2020.
The letter reads; “Operational constraints in all areas of the home buying industry caused by the disruption brought about by Covid-19 and the current advice to work at home where possible, have seen average property transaction times lengthen from 12 weeks to 20 weeks. We are concerned that consumers continue to offer on properties expecting to benefit from the SDLT rate reduction but in reality they may be too late.”
Some parties have called for the stamp duty holiday to be extended to September 2021, which would be an extension of six months. There have also been calls for the holiday to feature a tapering off process, which would avoid the “cliff edge” many fear.
NAEA Propertymark is calling for assistance
NAEA Propertymark chief executive Mark Hayward is one of the signatories on the letter sent to the Chancellor, but he has also released his own letter on the subject.
Mark said; “The joint letter sent to the Chancellor today is an important step in protecting those in the process of buying or selling a house that might miss out on the 31st March stamp duty deadline because of increased pressure on service providers within the industry, which is causing delays for buyers and sellers in the sector.”
Mark Hayward continued by saying; “The boom, caused by the stamp duty holiday, has been hugely beneficial for the housing market; however, the stamp duty cliff edge on March 31 could cause thousands of sales to fall at the final hurdle and have a knock on and drastic effect on the market which has recovered well from the Covid slump.”
Mark Hayward from NAEA Propertymark concluded by saying; “We are calling on government to rethink these timings, so pressure on the system can be released to allow transactions to complete and avoid a disorderly and distressing period for movers and businesses throughout the market.”
While there are new challenges to overcome in the housing market, people shouldn’t consider arranging a mortgage to be an impossible task. However, it is vital people accept help and assistance from professionals in the field. If you are keen to arrange a mortgage, speak to a mortgage broker or experienced adviser and make sure you are fully equipped to make an informed decision.