Back in July, the Chancellor announced that he was raising the Stamp Duty threshold to £500,000. This Stamp Duty ‘holiday’ will potentially save you up to £15,000 if you complete on a new property purchase before 31st March 2021, an initiative which has been credited with kick-starting a ‘mini-boom’ in the housing market.
However, we reported last month that the volume of sales currently progressing meant that thousands of buyers were set to lose out on the tax break because their purchase won’t complete by the deadline.
According to Zoopla, historic data shows that only 81% of mortgage applications made in December and 54% of applications made in January successfully complete by the end of March.
If you’re thinking of buying a property and completing by 31st March 2021, you’re in a race against time. So, here are five tips to help your purchase go through by the Stamp Duty holiday deadline.
1. Work with a good broker
One of the reasons that many transactions are taking longer than usual is because mortgage lenders are struggling with the volume of applications. With many suffering capacity issues due to remote working and coronavirus self-isolation, brokers have reported severe delays in lenders underwriting applications and processing mortgage offers.
If you want to avoid your application finding itself in a long processing queue, it can pay to speak to a professional. One of the ways in which we add value to clients is by recommending a lender who not only offers a great deal but who can also meet your deadlines.
If you must complete on a purchase by the end of March, it’s no use applying to the lender with the Sunday paper’s ‘best buy’ rate and waiting months for your mortgage offer. You could end up paying £15,000 in Stamp Duty or, even worse, lose the property.
We can find a lender who can process your application quickly and issue your mortgage offer in plenty of time.
2. Retain a good solicitor
Just as a good mortgage broker can help you to avoid delays, a great solicitor is also key to ensuring you complete in a timely fashion.
Many conveyancers are reporting delays in obtaining searches, again partly due to issues arising from the pandemic and local restrictions.
Indeed, just last month Hackney Council confirmed that all searches will now miss the 31st March 2021 Stamp Duty deadline.
In a statement, the Council said: “We are hoping to offer a partial land search service in the coming weeks, but we don’t expect to be able to offer full land searches to any resident before the end of the Stamp Duty holiday. We are therefore advising residents who need to complete a property purchase to speak to their lender or mortgage broker about taking out indemnity insurance.”
If you want to complete in time to take advantage of the tax break, you’ll need an experienced and proactive property solicitor on your side.
3. Be prepared
If you want to buy a property before the end of March 2021 you’re going to need to move quickly. That means you need to be ready to push the button on your mortgage application as soon as the vendor accepts your offer.
It’s important to be prepared. You don’t want to waste a couple of weeks obtaining copies of your accounts, duplicate payslips, bank statements, or other useful documentation.
One of the advantages of working with Altura is that we can help you to get all your paperwork prepared so you can move quickly as soon as you find a property.
4. Check your credit record
When you apply for a mortgage, a lender will use a credit reference agency to access your credit file.
Banks and building societies want to know that you have managed your credit well in the past and that you haven’t missed payments on credit cards or made late payments to loans.
If you need to move quickly, it’s advisable to check your credit file to see what information Equifax, Experian or TransUnion hold about you. Doing this gives you the opportunity to correct any mistakes and to deal with any anomalies before you make your application.
If you don’t, a lender might stumble upon something during the underwriting, delaying the process and your chances of meeting the March 31st deadline.
5. Get to know the estate agent
While you can’t choose the estate agent who is selling the property you want to buy, it can pay to develop a good relationship with the agent.
Speak to them to understand everything you need to know about the property you are buying. For example, is there a chain? Is the sale dependent on another purchase? Does the seller have their own timescale?
It’s useful to know everything you can about the property in order that you can manage expectations. If you find that the people selling don’t want to move until June, or they are in a complicated chain, it can ensure you don’t waste time and money trying to get everything concluded in time.
Get in touch
Buying a UK property before 31st March 2021 could mean you benefit from significant tax savings. However, you’re likely to need a proactive, professional team in place to meet the deadline.
If you’d like advice, please get in touch. Email [email protected] or call us on +44 (0) 20 3786 7270.
Please note
Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.
