Rishi Sunak confirmed that no tax is due on property purchases up to £500,000 from now until 31 March 2021 in his summer statement.
And borrowers have already realised the savings will mean they can move up a loan to value (LTV) bracket.
Ben Ramsey, director of Fairfield Financial Solutions, reported hearing from clients within 40 minutes of the announcement who said they were now able to do 85 per cent LTV as a result of savings from the policy change.
In under an hour of the announcement, Nathan Stacey, independent financial adviser at Continuum, received five enquiries relating to the changes.
He said: “After a battle with HSBC this morning and failing at a 90 per cent LTV deal, my clients can now proceed with a 85 per cent mortgage instead as they’ve saved so much money with the stamp duty holiday. Great work Rishi Sunak.”
The adviser added that the tax holiday should “take the pressure off those, very few, lenders who will lend at 90 per cent”.
Tax cut helps high LTVs
More brokers agreed the tax cut looked set to help out the high LTV end of the market.
Rob Gill, managing director at Altura Mortgage Finance, said: “In an environment where lenders have been tightening underwriting and constantly withdrawing higher LTV mortgages, the stamp duty holiday should lead to more confident lenders, fewer borrowers requiring higher LTV mortgages and therefore an increased availability for those who really need them.
“Brokers have been tearing their collective hair out at how difficult the mortgage market has become, especially at higher LTVs, they should welcome anything which helps lenders help us and our clients, even only temporarily.”