The tail end of last year saw a rush of buyers who hoped to buy a property before the temporary stamp duty break ends on 31 March.
The surge in activity has led to delays in the processing, prompting calls from across the industry for an extension amid fears tens of thousands of borrowers could unwittingly end up with a tax bill they had not expected.
Hampshire Trust Bank last week said it would now decline cases from applicants hoping to beat the stamp duty deadline.
However, some of the big high street lenders have told Mortgage Solutions they will not be following suit and will continue to accept cases – although they won’t offer any guarantees.
A HSBC spokesperson said: “We are very conscious of the stamp duty deadline and while we do not propose to stop accepting mortgage applications from potential purchasers and remortgagors, given the tight deadline involved, we would not be able to guarantee that an application that comes in now will be completed before the deadline.
“In fact, it is unlikely given the detailed work that goes into a mortgage and the individual complexities that could present themselves.
“We would encourage brokers to not give false hope to applicants and manage their expectations. “We will, of course, process all mortgage applications as quickly as we can.”
And Santander said it has not declined to take applications on the basis they won’t meet the stamp duty deadline.
However, the lender said it is stressing to customers and brokers “the importance of making sure that all the necessary work, including legal work, is completed by the stamp duty deadline”.
No other lenders reject applications yet
HTB is the only lender so far that has actively discouraged applications, according to Rob Jupp, group chief executive at The Brightstar Group.
He said: “We have found that, in general, lenders are heavily caveating applications to make it clear that there is a good chance they won’t complete by the end of March deadline.
“At this stage we haven’t seen any other examples of lenders proactively discouraging applications, but we would expect others to follow suit.”
Of course, brokers with clients racing to complete by the cliff-edge should check lender service times for some guidance on how fast an application may be processed.
Many lenders have improved processing times in recent weeks, which is helping to ease through transactions.
Jane King, mortgage and equity release adviser at Ash-Ridge Private Finance, said there are a couple of lenders offering “excellent turnaround times”.
She added that it’s “very tight” but buyers stand the most chance of meeting the deadline if they are also chain-free and using a good solicitor and where there are “no complicated leasehold purchases or awkward clauses in the deeds such as rent charges”.
She added: “Shared ownership and Help to Buy are doubtful due to the complex legals.”
Searches and indemnity protection
Chris Sykes, mortgage consultant at Private Finance, said buyers can still meet the deadline at this point, but it largely depends on the legal aspects – and not the lender.
He added: “Many clients are still buying with a view of meeting the stamp duty deadline, in fact we are incredibly busy because of it, obviously it is at a clients’ own risk at this point.
“But we are getting most mortgage offers within two to four weeks so a lot is down to the legal side of things and where some cases will fall through, I would imagine.
“I think searches are the one of the things holding people up in many cases unfortunately.”
Greg Cunnington, director of lender relationships and new homes at Alexander Hall, also agreed conveyancers are the issue rather than lenders.
He said: “With the notable lender service improvements seen in recent weeks, it means that a mortgage offer for a well-packaged case should be no issue still to meet the stamp duty deadline.
“As such, the complication is more around the speed the conveyancers can work, and if the local authority searches can be returned in time, or an indemnity can be put in place if not, in which case it needs to be ensured that the application is submitted with a lender that would be comfortable with this.
“As such we are of course advising clients they should not be assuming that they can complete in time for the deadline, but that as long as they get their documents together upfront and the application is submitted with a lender with good current service timeframes, if they ensure they have a good quality solicitor they may well still be able to complete in time for the deadline.”
