Now that the Stamp Duty Holiday is over, what does it mean for the future of mortgages in the UK?

The government initially brought in the Stamp Duty Holiday on house sales to remove barriers to the housing market for first-time buyers and people struggling to find a place on the property ladder. When the holiday on Stamp Duty was originally announced by the Chancellor of the Exchequer Rishi Sunak in July 2020, it was to help stimulate the UK economy in the first lull of the Covid-19 outbreak. After that summer, the case numbers rose again, and we saw a second wave that took the country right through until Spring 2021.

The Stamp Duty Holiday, or SDH, offered a savings opportunity for people in the housing market and was extended until the 30th of September 2021. The end of the SDH caused some nerves for mortgage lenders and brokers because it might have slowed the level of interest that has driven such a prominent boom over the last 18 months. Now we're over a month past the end of the holiday, things don't seem to be slowing down as dramatically as some predicted, and its good news for the mortgage industry.

A rush at the end

The rise of home working, coupled with other unique market conditions resulting from the Covid lockdown, led to accidental savings and a "race for space". These are the contributing factors that have seen homes across the country selling well in excess of their asking price.

As the SDH came to a close, there was a big rush in property hunters getting their mortgages through before the deadlines. As a result of this spike of interest, mortgage brokers enjoyed the best September in a decade as transactions flocked at the end of the holiday, with 160,000 homes selling in the last phase of the holiday.

Market confidence remains strong, but will it continue?

Mortgage brokers can remain optimistic as research from OnTheMarket revealed that some 74% of active buyers and 81% of active sellers believed that they would buy and sell a home in the next three months, despite the end of the SDH.

We should consider the full picture however, as confidence is not consistent across the market. Figures reported by the Hamptons Letting Index revealed that the share of new homes bought by investors in the BTL market rose by just 1% in the SDH. This is a consideration for brokers when they balance the mortgage cases they work on, and which areas of the market offer the best potential. With uncertainty ahead, we want to help, there are steps that brokers can take to remain competitive:

1. Understand your current client base and any further implications they may face now the SDH has come to a close - assess if they are likely to be heavily, somewhat, or not at all affected
   
   
2. Reach out to existing client bases - those who may be at the stage of remortgaging or those who have been in properties for a few years and considering moving/upgrading
   
   
3. Implement CRM to help manage customer data and assess who is in need of your services now
   
   
4. Assess your current offering and consider expanding to a wider base - if your main USP and client base is impacted, consider expanding your specialisms

Looking ahead

Just recently, the Bank of England announced that its interest rates would continue to stay at a record low level of 0.1% for now. Actions like this are likely to drive the housing market for some time to come. The government also recognises that FTBs still need help to find their footing on the property ladder, Help To Buy along with other schemes will support continued housing interest for the immediate future. While we have good reason to be optimistic, it's always best to err on the side of caution and have a plan in place for every eventuality. Luckily, The Mortgage Lender are here to help.

We can provide brokers with a range of support options to help secure an agreement from customers across a range of different buying criteria, such as those who are self-employed. TML are happy to engage with people who are self-employed to help get them on the road to their new home. We look at individuals on a case-by-case basis, covering their pre-tax profits and salary to ensure we consider their latest income figures, rather than simply averaging down. We won’t let the impact of Covid prevent people from getting a mortgage either.  If a self-employed person’s business has recovered from the circumstances of the past 18 months, we will consider pre-Covid accounts to ensure they have the best chances of securing a mortgage.

Whether you are looking to target an FTB, complex incomes or someone who is looking to remortgage and upgrade their existing home, we consider a wide range of cases.  At TML we specialise in real life, our experienced team know how to work with all types of client groups such as self-employed, contractors, complex incomes, portfolio landlords, ltd companies and more. This ensures that everyone can find a mortgage product that is right for them.