The Clock is Ticking: Can You Meet the Stamp Duty Deadline?

31st March 2021 may seem like a long way off, but with so many people, homebuyers and buy to let investors alike, trying to make the most of the stamp duty holiday, critical systems are struggling. Business Development Director, Jeni Browne, explains why NOW is the time to submit your application or risk losing out.

We’ve reported a lot about the impact of the pandemic in lender service times this year. It was inevitable that the combination of adapting to working from home, valuation process changes, furloughed staff, mortgage payment deferrals and the stamp duty holiday would slow things up. While it’s been frustrating for many, I think the lenders have actually done incredibly well to manage workload and client expectations, given the circumstances.

Of course, lenders are not the only cog in the property purchase process; solicitors and Local Authorities play a huge part in getting you to completion. Unfortunately, it seems that the Local Authorities are starting to feel the strain of the extra workload when it comes to returning property searches. Consequently, this is holding up the purchase process even further.

What is a Local Authority Search?
An essential part of the property purchase conveyancing process, Local Authority Searches provide specific information about the property you’re purchasing, including the land it’s on and surrounding area. Lenders use these reports to ensure that the property in question is not likely to decrease in value due to any development plans in the area, or planning consent for neighbouring properties. These reports are a mandatory part of any property purchase which requires a mortgage and still strongly advised for cash purchases.

How Long Do Local Authority Searches Take?
Under normal circumstances, Local Authority Searches tend to take a maximum of two to three weeks, although it varies from council to council. However, due to the impact of the pandemic and increased workload, nearly 30% of Local Authorities are now taking longer than three weeks to return property searches. In that 30%, the number of days expected to return a property search varies from 22 (Enfield Borough Council) to 171 (Hackney Borough Council), with an average of 33 days (nearly five weeks) across the board. For the 70% that are taking under three weeks, the average time to return searches is two weeks (13 days). 

What we’re seeing, however, is the number of days creeping up the closer we get to the stamp duty holiday deadline. In fact, Cornwall Council has suspended all searches “until further notice”, and Hackney Borough Council is quoting around six months! When you consider the fact that we will have Christmas closures soon too, it’s likely waiting times will increase even further.

What you need to remember is that this time is in addition to the lender application to offer service time. At the moment, it is taking lenders, on average, 16 working days for residential mortgage applications and 18 working days for buy to let mortgage applications (Mortgage Brain), equating to three and four weeks respectively. Although, from my own recent experience and conversations with other brokers at Mortgages for Business, I think the buy to let lender service times are longer than this report suggests. Furthermore, what this doesn’t take into account is more complex properties and borrowers which take longer to underwrite.

I want to make the most of the stamp duty holiday, what can I do?
If you want to benefit from up to £15,000 in tax savings, then you need to get your mortgage application in as soon as possible. When the second home 3% surcharge was introduced on 1st April 2016, we were in the thick of it helping buy to let landlords get purchases completed in time. And let me tell you, it was manic! We know there will be last-minute mortgage applications from lots of people after Christmas, but with lenders and Local Authorities already working flat out, leaving it till January will not guarantee you those savings.

If you want to help your mortgage application progress more quickly, I would strongly recommend using a mortgage broker. Not only do we have access to more lenders and mortgage rates than you would independently, but we can speak to lenders about your case before submitting an application. We then package up your application with everything the lender requires to ensure there are no unnecessary delays, and will continuously monitor its progress through to completion. We have excellent working relationships with a lot of the top residential and buy to let mortgage brokers, which means we have contacts you wouldn’t be able to access if you apply independently.

Top 10 Local Authorities with the Longest Searches Wait

Top 10 Local Authorities with the Shortest Searches Wait

Don’t miss out! Contact our team today on 0345 345 6788 or email enquiry@mortgagesforbusiness.co.uk to get your next property purchase underway!

Source: Search Flow. Data correct as of 08/12/2020.

9th December 2020