Homebuyers who want to take advantage of the stamp duty holiday have been warned to act quickly as high demand for mortgages and coronavirus restrictions are creating delays in the process.
David Hollingworth of brokers L&C said getting a mortgage was taking about double the usual time as lenders struggled with the volume of business, and needed longer to review some applications. “To get a mortgage offer in normal times you are usually looking at a couple of weeks from the application,” he said, “Now you could be expecting it to take at least a month, or possibly longer.”
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For self-employed borrowers, for instance, most lenders are looking closely at recent bank statements, instead of two years’ business accounts as previously. “They are essentially underwriting individual cases and they only have so many staff to do that,” he said. In England and Northern Ireland there is currently a stamp duty holiday on homes costing up to £500,000, while in Scotland and Wales the tax-break is for properties costing up to £250,000.
The holiday has helped fuel a housing market that was already thriving after it came out of lockdown in the spring.
This high demand is one factor in the delays, but dealing with the coronavirus crisis is having an impact on other parts of the homebuying process.
“The conveyancing process is also taking longer,” Hollingworth said. “Local searches are taking longer because in some councils staff have been redeployed – the new lockdown could have an impact too.”
Hollingworth said L&C was already warning people about the end of the stamp duty holiday on 31 March. “Buying a home can take three months at the best of times – if you’re not in the process soon you can’t be banking on completing by the end of March.”
Last week, online broker Trussle said it was currently taking 115 days to complete a home purchase, meaning buyers would need to make a mortgage application on a property by 6 December. However, in some parts of the country the process is taking longer, with buyers in the East Midlands taking 166 days to complete a deal.