In the year since the Chancellor, Rishi Sunak, delivered his first Budget to a packed Commons chamber in March 2020, more than 135,000 people in the UK have died from Coronavirus, there have been three national lockdowns, the economy has shrunk by 9.9 per cent and Coronavirus support measures have cost around £280 billion.
Thousands of people across the UK have purchased new homes to take advantage of the Government’s Stamp Duty Land Tax (SDLT) holiday, but Legal & General Mortgage Club has warned a backlog in the sales and mortgage process means that sales need to be completed quickly.
The SDLT holiday announced earlier this year, ends in March 2021. Homebuyers need to complete a purchase before then to take advantage of not paying Stamp Duty on purchases below £500,000.
Those buying second properties or expanding a wider property portfolio also benefit from the holiday, although they must still pay the three per cent additional home surcharge. For a person buying a second home, this could still cut the amount of SDLT they pay in half in some cases.
Legal & General Mortgage Club explained that bumper levels of activity and demand in the housing market since it re-opened in the summer had left lenders, solicitors, and surveyors overwhelmed, causing delays to the homebuying process.
It said that it was taking nearly four months on average for transactions to go through, which is why homebuyers needed to act soon.
The delays have been further complicated by the difficulties of the pandemic and changes to individuals’ incomes.
A study by the Legal & General Mortgage Club found, for example, that borrowers with more complex backgrounds, such as those with impaired credit histories or who have been on furlough, may need to allow up to six to eight weeks to get approved for a mortgage.
Kevin Roberts, a Director at Legal & General Mortgage Club, said: “The Government’s Stamp Duty holiday has helped to encourage many hopeful buyers to press ahead with their homeownership plans, providing a much-needed boost to the economy.
“However, those wishing to take advantage of the holiday will need to plan carefully to avoid missing the March 2021 deadline, particularly if they have their own property to sell first.”
Mr Roberts added that policymakers may wish to consider the strict deadlines, so that those in the homebuying process aren’t unfairly penalised. He said: “As homebuyers rush to take advantage of the Stamp Duty holiday, policymakers need to consider if a tapering of the Stamp Duty deadline is needed instead of a hard deadline.
“We need to avoid those moving or purchasing a home missing out through delays after 31 March when the holiday ends.”