Stamp duty extension: Home buyers only have 4 weeks to take advantage of new deadline

New research from Koodoo, a company that powers mortgage comparison for major price comparison websites, and financial technology provider Iress reveals that despite the Government’s 3-month extension to stamp duty relief, buyers will have to start mortgage application procedures before 29th March if they are to be exempt.

The research found that volumes of first time buyers trying to start the home buying process in January and February 2021 are at record highs. However, data from Fluent Mortgages, a whole-of-market mortgage broker, shows that the average time between first receiving advice and completing on a mortgage today stands at 93 calendar days, longer than the stamp duty extension, meaning that consumers will need to have started the mortgage process by Monday 29th March at the latest to meet the extended deadline.

Home buyers trying to start the mortgage process late may end up with an unwanted stamp duty bill of £5,700 (replacing their main residence) or £700 (first time buyers), based on the average home buyer property value of £314,000, as seen across Koodoo’s comparison site partners.

Koodoo's chief executive officer, Seb McDermott said: “The increase in first time buyer traffic we have observed on our comparison site partners in the last few weeks points to a last minute rush to take advantage of the stamp duty tax holiday. Even with an extension of 3 months to the deadline, consumers will need to be well on their way to getting a mortgage application submitted by the end of March to ensure they have a good chance of meeting the new deadline”

Iress’ executive general manager, Dave Miller said: “We’re clearly seeing the signs of an uptick in mortgage activity and the extension to the stamp duty relief will go a long way to supporting that increase over the next few weeks. However, with the length of time it currently takes to process a mortgage application, anyone thinking of buying a home needs to be aware of the implications of the June deadline. It’s tempting for many people to think they have a lot more time than they actually do.”

Expected SDLT holiday deadline date Latest mortgage start* Latest binding offer issued**
Wednesday 30th June 2021 Monday 29th March 2021 Monday 10th May 2021

* latest date on which advice needs to be received to be likely to complete before the deadline, based on today’s completion timeframes

** latest date on which a binding mortgage offer needs to be received from a lender to be likely to complete before the deadline, based on today’s completion timeframes

Full analysis can be found in Koodoo and Iress’ joint monthly report on the online mortgage market, which can be found here. To sign up for the monthly report, please use this link.

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