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Stamp duty holiday driving ‘huge increase’ in let-to-buy and potential investors – poll results

  • 07/08/2020
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Stamp duty holiday driving ‘huge increase’ in let-to-buy and potential investors – poll results
All kinds of mortgage clients have taken advantage of the stamp duty holiday, brokers have said.


The Mortgage Solutions poll results suggest higher interest from home movers and first-time buyers, but many reported that the stamp duty holiday drummed up activity across the board. 

We asked: After the stamp duty holiday announcement, which type of client have you received the majority of enquiries from?  

First-time buyers and home movers were reported to be equally motivated by the tax break, as both client types accounted for the majority of enquiries seen by brokers with a 35 per cent share each. 

Buy-to-let landlords accounted for 21 per cent of enquiries following the stamp duty holiday and remortgage borrowers made up nine per cent. 


All can benefit 

The announcement seemed to spark a wave of activity for all client types as Sam Murphy, founder of Mortgage Medics said his firm saw a record number of new enquiries in July, with many mentioning the stamp duty holiday as a reason for seeking a mortgage. 

“I don’t think we expected the stamp duty change to generate quite so much activity, especially given the short supply of high loan to value (LTV) lending at the moment.

“But of course the fact that first-time buyers, movers and landlords wanting to expand their portfolio can all potentially take advantage, means it can stimulate the property market at all price points and property types – which is great news,” he said. 

Lilla Dilliway, mortgage adviser at Bluewing Financials also said the impact was felt across the board. 

“It wasn’t just mentioned by people submitting new enquiries, but also existing clients, who now require a smaller borrowing, as they don’t have to factor in the stamp duty cost, she added.   


Spurring existing intentions 

For some borrowers, the stamp duty holiday encouraged them to act on intentions they already had but were putting off. 

Dilliway said the relief had allowed her clients to take a lower LTV mortgage than originally requested, giving them more financial wiggle room to go ahead with plans.  

She noticed first-time buyers, home mover and investors alike bringing forward purchase decisions.  

Chris Sykes, mortgage consultant at Private Finance, said the first-time buyers he had seen were mostly a result of the backlog caused by the Covid-19 lockdown as they already generally benefitted from stamp duty relief.  

However, the homeowners coming to his firm were using the tax break as a reason to up or downsize earlier than intended. 

For Stuart Gregory, managing director of Lentune Mortgage Consultancy, the high number of home movers he saw were also acting on the push of the stamp duty holiday. 

For many of these clients, they appear less concerned about the future of the economy – instead they feel the right time to make a move is now. 

“What happens in April 2021 though, is anyone’s guess, but we’ve been here before in 2016,” he said. 


Creating opportunities 

As well as giving clients the motivation to move forward with plans, brokers reported that borrowers were also using the holiday to make investments. 

Mortgage Medics’ Murphy said he had seen a “huge increase” in owner occupiers seeking let-to-buy mortgages to turn their homes into investment vehicles. 

Private Finance’s Sykes added: “We have fair number of potential investors, but more are preparing themselves for if and when they can snap up a deal.  

“Whether this be releasing equity from a current buy-to-let or residential property to use moving forward in investments, or just seeing how things work on the buy-to-let side of things in general.” 

For others, the stamp duty holiday did not signify an opportunity to invest but to rethink their priorities around what they wanted from their residence. 

Echoing suggestions made by surveyors earlier this year, Murphy said the increase in activity caused by the tax holiday had been compounded with the desire to escape inner city life. 

He said“The other big motivator is people’s perception of how work and life may be different going forward; outside space is many prospective buyers number one requirement, and suddenly commuting to a regular place of work is much less important.

“So we’ve seen many homeowners looking to move further out from London, to get more space and value for money.  

Who knows what the future holds, but for now these two motivations are fuelling a busy market. 


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