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Homebuyers struggle to take advantage of the Stamp Duty holiday

A new survey of UK homeowners and buyers has revealed that, while more than half want to take advantage of the government’s Stamp Duty holiday, almost a third have been denied a mortgage. 

The survey, carried out on behalf of bridging lender Market Financial Solutions, also showed that 43% of people who bought or attempted to buy a property in 2020 encountered significant delays or complications when applying or a mortgage.

The government announced the Stamp Duty changes in July which mean that tax is not payable on the first £500,000 of all property sales in England and Northern Ireland until March 31, 2021. 

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, CEO of MFS, said the Stamp Duty holiday had sparked activity among buyers and sellers but many prospective homebuyers were unable to take advantage of this initiative.

“Many banks are treading carefully and, as a result, applications are taking longer to process. There is also a higher chance of an application being rejected. This is putting property chains at risk of collapsing,” Raja said.

“It is important that lenders keep lending to 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.”

16 September 2020

 

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