There’s a warning today that landlords need to move quickly and selectively if they are intending to purchase a property ahead of the March 31 stamp duty holiday deadline.

Specialist buy to let broker Mortgages for Business says it has examples of how the current market frenzy is delaying transactions. 

It says some mortgage lenders are taking 10 minutes simply to pick up the phone, and then taking 35 days to do the mortgage paperwork. A search recently commissioned by Mortgages for Business took no less than 145 days to complete.

Last July Chancellor Rishi Sunak raised the initial stamp duty threshold from £125,000 to £500,000. The move was designed to boost the economy amid the Coronavirus pandemic and stimulate the housing market following the Spring 2020 lockdown.  

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.”

While the SDLT means landlords don’t have to pay stamp duty on transactions under £500,000, they must still pay the three per cent buy to let surcharge. On a £500,000 buy to let purchase, the £30,000 tax bill would be cut in half thanks to the holiday.  

Jeni Browne 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 lender’s 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.  

“It’s therefore absolutely critical that landlords speak to a specialist broker who can ensure they not only get a competitive deal but that they also get one that has a realistic chance of going through before the deadline runs out.  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.”