The mortgage market over the past few months has been busier than anyone expected. As a result, I believe strongly that despite the doom-mongering, the end to the stamp duty holiday will be nothing more than a small speed-bump.
We may see the market slow around March 31 as people come to terms with stamp duty being a reality once again, but once we are past it, I fully expect that the market will continue to gather speed.
Why should brokers be optimistic for 2021?
History is instructive and by looking at 2020 we can predict, with some confidence, that demand will not drop dramatically – regardless of when the stamp duty deadline falls.
While the stamp duty holiday certainly helped drive the market last year, it certainly was not the only factor.
Savings increased massively through lockdown, allowing clients to put down larger deposits. Being trapped at home also made people re-evaluate what they needed in a property.
Whether that was a garden during summer, or an extra-bedroom to convert into an office, there were plenty of people looking to move as a result of increased time at home.
Sadly, as a result of lockdown there were also a number of divorces, causing more people to be looking for more properties. As a result, there is still more demand than supply.
All these factors mean, no matter when the stamp duty holiday ends, the housing market should continue to thrive.
Despite the recent lockdown, confidence from lenders has remained and should be improved by the news of the vaccine. Therefore, we are unlikely to see higher loan to value (LTV) mortgages withdrawn, as we saw in 2020.
With 90 per cent LTV mortgages returning to the market now, we should see more first-time buyers buying in early 2021 as well, particularly as they are unlikely to be affected by the reintroduction of stamp duty.
This trend of increasing first-time buyers should continue throughout the year and help keep the market moving.
Benefits of home working
Another reason for optimism is that, despite the latest lockdown, the housing market has been given the green light to continue, although there is speculation viewings may be stopped.
The vaccine being rolled out across the UK should also increase confidence in the market and spur on activity.
We set monthly records for business in the last quarter of 2020, so while we are likely to see a slight reduction from that pace, I believe that discussions of cliff edges are well off the mark.
The demand is still there and although prices may reduce when the furlough scheme ends, this should help first-time buyers onto the housing ladder.
Most brokers have also adapted incredibly well to working from home and, are now supporting clients remotely with ease.
This shift to remote working has actually helped many brokers to provide best advice to more clients. Without the need to travel to meet people, brokers can action tasks quicker and have more time to spend with clients and talking to lenders.
So, with plenty of clients set to be looking to buy and brokers better equipped to deal with more people, 2021 should be another great year to be a broker.