Brokers report self-employed business down and call for stamp duty surcharge cut – Family BS

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  • 09/06/2020
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Brokers report self-employed business down and call for stamp duty surcharge cut – Family BS
Demand for mortgages from self-employed borrowers has slipped notably since the start of the coronavirus outbreak, according to a survey by Family Building Society.

 

The mutual quizzed 160 advisers on how their businesses had been affected over the last three months, with 40 per cent saying they had seen a fall in interest from self-employed borrowers.

Just over half had seen demand stay the same, while just eight per cent had witnessed an increase.

It also appears brokers have been having more difficulties in securing deals for the clients that are presenting themselves.

Two thirds of advisers who responded to the multiple-choice question, said that lenders were being more cautious in the sector, with 55 per cent saying lenders were asking for more details.

As a result, 47 per cent said they were having difficulty in placing cases.

 

Buy-to-let market

In the buy-to-let sector the lender asked for brokers’ views on the situation.

While many said that business had got quieter, there were those who noticed an uplift in enquiries from landlords – and suggestions were made to encourage the market.

Cutting the three per cent stamp duty surcharge on additional property purchases was one of the most impactful and popular ways for the government to support the sector brokers noted, with some highlighting that it was causing issues to completing purchases and mortgages.

One broker commented that they were seeing “very few purchases, the tax has killed it in the south and as far as I see across the UK”.

Another added: “Reduce the Stamp Duty Land Tax surcharge on second properties, especially in areas with lower demand.”

Respondents also urged lenders to not be overly cautious during the current situation and accommodate cases where possible, particularly in the limited company space.

Said one broker: “Limited company buy-to-let is becoming hard to place, loan to values (LTVs) are restricted based on the current climate and harsher underwriter views appear to be being taken at present. If someone has an average credit file the LTV may be restricted further still.”

Another added: “Lenders need to adopt a clearer approach at 75 per cent LTV for portfolio landlords, there are too many ‘hidden’ criteria.”

And the issue of lenders seemingly “penalising clients that have taken payment holidays saying they are financially in trouble where in actual fact, the tenant is in trouble” was also raised.

 

 

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