Homebuyers struggle to take advantage of the Stamp Duty holiday

By Bridging Loan Directory -

Paresh Raja Market Financial Solutions

A new survey of 1,262 UK homeowners and buyers has revealed the challenges people are facing within the property market at present. It found:

  • 52% of current homeowners want to take advantage of the stamp duty holiday to purchase a new property, but are concerned about their ability to get a mortgage
  • Following the introduction of the stamp duty holiday:
    • 32% of prospective homebuyers have been denied a mortgage, while 45% have been gazumped
  • 43% of people who have bought or tried to buy a property in 2020 have encountered significant delays or complications when applying for a mortgage from a bank

Issues in accessing mortgages are preventing prospective homebuyers in the UK from taking advantage of the Stamp Duty Land Tax (SDLT) holiday, new research by Market Financial Solutions (MFS) has revealed.

The bridging lender commissioned an independent survey of 1,262 UK homeowners and  homebuyers. Of those, more than 200 have bought a house in 2020, while over 300 are currently on the hunt for a property.

It found that 52% of current homeowners want to take advantage of the SDLT holiday, but are concerned about their ability to get a mortgage.

The holiday means the tax is not paid on the first £500,000 of all property sales in England and Northern Ireland until 31st March 2021.

Following the introduction of the holiday on 8th July 2020, 32% of prospective homebuyers said they have been denied a mortgage.

A further 43% said they have been gazumped on a property since the holiday was announced.

Almost half (46%) of those who have bought a property in 2020 said they encountered significant delays or complications when applying for a mortgage from a bank.

Almost two-fifths (38%) of current house-hunters said the same thing.

MFS research also showed that 36% of UK adults planning to buy a property in the next year are likely to consider alternative finance options like bridging loans.

Paresh Raja, pictured, CEO of MFS, said: 

“The stamp duty holiday has already had a positive effect on the UK property market, sparking much more activity among buyers and sellers.

However, today’s research shows that many prospective homebuyers are unable to take advantage of this initiative.

Frustratingly, this is often due to the challenges of securing a mortgage, which are beyond buyers’ control.

Many banks are treading carefully and, as a result, applications are taking longer to process and there is a higher chance of an application being rejected.

This is putting property chains at risk of collapsing.

At this point in time, it is important that lenders keep lending – they must ensure buyers have access to the finance needed to complete on a purchase.

Failing this, the Stamp Duty holiday will only have a limited effect.”