95% LTV loans and SDLT

ended 22. April 2021

Is it too late for buyers who are hoping to use both the 95% LTV mortgage guarantee AND the full Stamp Duty holiday at the same time?

To this end, how long, in your experience, is it taking for sales to complete, and are those people hoping for a double whammy of a Government-backed loan and zero SDLT set to be disappointed?

6 responses from the Newspage community

"While it is physically possible to benefit from the full Stamp Duty holiday with a Government-backed loan, as we've just had two first-time buyers get a whole transaction through to completion within five weeks, the door to the double whammy is closing fast. "But without a proactive conveyancer and mortgage broker, and an admin team to chase all parties up, your chances are slim to none. Muddling through is not going to be an option and even then things could be out of anyone's control if something unexpected arises. "The biggest delay at the moment is Local Authority searches, which are taking longer than normal to come back to solicitors. And even though a growing minority of lenders will allow an indemnity policy to be set up instead of waiting for months, this avenue still seems to be treated with a bit of mistrust by many mortgage advisers and conveyancers. "The average homebuying timescale still looks like around three or four months for the majority of buyers so sadly there are going to be disappointed homemovers."
"Any buyer wishing to beat the Stamp Duty deadline will need to be exceptionally well organised with a good solicitor, mortgage broker and estate agent firmly onside. "Crucially, your seller and everyone else in the chain will all have to want to move by the end of the deadline. A buyer can be brilliantly organised, but if their seller isn't ready to move they're certainly not going to leave themselves homeless to help their buyer save Stamp Duty. "Talking to the estate agent at an early stage to find out the seller's timing and circumstances is arguably the most important thing to do."
"Considering the Government-backed 95% loan-to-value mortgages only went live a week or so ago, the chances are slim to zero that applicants submitting a mortgage application for one now will benefit from the maximum Stamp Duty holiday on top. "Transactions are still being plagued by delays across all aspects of the application process, including mortgage underwriting, property surveys and conveyancing. "However, it's worth noting that 95% loan-to-value mortgages had started to reappear before the Government scheme and that zero Stamp Duty is being replaced by reduced Stamp Duty until the end of September, so I can't see vast swathes of consumers losing out."
"As things stand, I still believe there is time, perhaps another two or three weeks, for those looking to utilise both schemes to get onto the housing ladder, but it's vital you have your house in order (pun intended) when it comes to your mortgage application. "There are enough lenders to hopefully mean mortgage offers won't be delayed because one lender is receiving too much business. "As ever, it's going to come down to solicitors and Local Authority searches, but let's bear in mind that in some parts of the country where house prices are below £250,000, people won't be paying Stamp Duty until the end of September and first-time buyers don't pay Stamp Duty for properties below £300,000."
London Money FS
"The sooner you start the process, the sooner you end it. There is likely to be a similar situation in May and June to that which we experienced in January and February, namely blind panic and a call to move the cliff edge once again. "The lenders themselves, in the main, appear to have their systems and processes back to a degree of efficiency but the higher loan-to-value cases will be thoroughly cross-referenced and checked, and if demand is high we might see delays and a drop in service standards. "Throw in huge conveyancing backlogs and I would suggest it is imperative that buyers don't dither with starting the home buying process and ensure they have all documents prepped and ready to go. You snooze, you lose."
"The current volume of conveyancing transactions being processed is higher than I can ever remember and the completion process is taking almost twice as long as 'normal', at approximately 18 weeks. "For buyers who have a straightforward, chain-free purchase there is a possibility of the sale completing before 30th June 2021, and therefore being able to take advantage of both the Government guarantee and full Stamp Duty holiday, but these people are likely to be few and far between."