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Time running out for landlords to take advantage of stamp duty holiday – Young

by: Bob Young, chief executive officer of Fleet Mortgages
  • 04/09/2020
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Time running out for landlords to take advantage of stamp duty holiday – Young
One of the largest buy-to-let advice firms urging landlords to move quickly to take advantage of the government stamp holiday may seem like an obvious message to send out into the market.


But delve a little deeper into the call from Mortgages for Business to landlords to do just this and you’ll see that there is plenty behind the headline to justify those investors getting their houses in order right now if they want to complete by 31 March 2021.

Not least of course is the process they will need to go through when they have found a property they want to put an offer on.

There is no doubting that everyone will be working flat out in order to achieve completion by that date, and there are clear historical precedents for when the entire industry did just that.

You only need to go back to 2015/16 when the three per cent stamp duty surcharge was about to be introduced, to see the increase in demand, landlord activity, and in pressure on property professionals to get these sales over the line before the extra charges kicked in.


Not the same scenario

However 2020/21 feels a lot to different to back then.

We are barely out of lockdown, many firms are still not at full capacity, thousands of people are not in offices, many are still furloughed, and there is uncertainty about second waves, local lockdowns and what this might mean for moving property sales through the system.

You might also have seen the recent suggestion, from the Conveyancing Association based on the average time of marketing to completion, that a property would need to be up for sale by the end of September in order to complete by the end of March and thus secure the stamp duty saving.

I suspect that’s an average taken from previous years, not this one.

The good news however is that, based on initial activity levels post-stamp duty announcement, landlords are not being deterred by this, although their expectation that a sale can be completed is going to need to be matched by reality.


Advantage may slip away

As Mortgages for Business pointed out, while supply of homes for sale should improve over the coming weeks and months, this does not necessarily favour landlords as the current situation may do now.

We were already seeing an uptick in remortgage activity immediately post-lockdown – before the stamp duty announcement was made – which seemed to show that landlords were literally gearing up to add to portfolios anyway.

If they have that finance in place, the ability to secure a property now will clearly put them in a strong position in terms of making offers and having them accepted.

As supply increases, and residential owners get to grips with their own needs and purchase options, that ready to move quickly advantage may slip away.


Competitive market

There are other existing advantages for landlords right now that may not hold forever – namely strong competition from buy-to-let lenders, keen pricing and broadening criteria, plus current property valuations which may begin to inch up the further along we move.

From our perspective, there is a strong desire to help as many landlord borrowers as possible to secure their remortgages/purchase loans in order to help them achieve a stamp duty saving and to do everything we can to get them to completion well in advance of the deadline.

The ability to do that will however rely on the market looking more normal for the next seven months or so, and for no significant Covid-19 related setbacks.

This is truly the great unknown and, as advisers active in this market, there is therefore no reason to hold back on a message that mirrors that of Mortgages for Business.

The time for landlords to act is now.



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