Since the start of the coronavirus outbreak, positive news about the mortgage market has been hard to come by. Instead, we’ve seen predictions of economic disaster, soaring unemployment rates and a deep property market slump.
However, as lockdown restrictions eased, the outlook started to look more hopeful, though infection rates started to rise in early September. Figures from mortgage technology provider Twenty7Tec1 have revealed that mortgage searches in July rose to their highest levels in 2020, even beating those recorded before lockdown. Twenty7Tec has described the recovery as ‘astonishing’.
Stamp Duty ‘holiday’ gives helping hand
The nine-month Stamp Duty Land Tax (SDLT) cut has had a large part to play in July’s mortgage boom.
The tax break, announced by the Chancellor on 8 July, raises the threshold at which Stamp Duty becomes payable on property purchases in England from £125,000 to £500,000 (though the 3% surcharge on buy-to-let and second homes still applies). Properties in the £500k to £1m bracket also benefit and have become more accessible thanks to the huge savings that can be made, and mortgage searches for properties in this price range have jumped as a result.
The Stamp Duty holiday will remain in place in England until 31 March 2021. Different rules and thresholds apply to the Land Transaction Tax holiday in Wales.
Rise in first-time buyer interest
The pandemic has hit first-time buyers particularly hard. At the height of lockdown, lenders withdrew hundreds of mortgage products aimed at those with lower deposits and many also tightened their lending criteria. However, there are signs confidence is returning, with figures showing searches among first-time buyers are increasing.
Search for the right mortgage
If you’re looking to take advantage of the Stamp Duty cut, don’t hesitate in getting your search underway. An Independent Mortgage Broker can help you weigh up your options in these challenging times and advise on the best mortgage for your circumstances.