How the end of the stamp duty holiday is affecting the market

Wells says only one of his clients has mentioned the September deadline for the stamp duty saving, with most seeing the current discount as a silver lining compared to the “huge sums” they are spending on buying a new home.

Chris Sykes, an associate director and mortgage consultant at Private Finance, describes a similar sentiment among clients. “Some buyers are keen on hitting [the September deadline] but not to the extent of the June deadline by any stretch of the imagination.

“The saving now is up to £2,500 rather than £15,000, so it is a tiny percentage of what it once was. It’s seen as a ‘nice to have if possible’ but it wouldn’t necessarily be a deal breaker.”

Trinity Financial’s Strutt agrees there is not the same level of demand for the tapered stamp duty holiday compared to when people were “desperate” to complete before the June deadline.

The provisional, non-seasonally adjusted estimate of UK residential transactions in June is 213,120, according to statistics from HM Revenue & Customs. The figure is 108.5 per cent higher than the previous month, as taxpayers sought to complete before the June deadline.

Improvements among lenders

Lenders’ time frames have also “greatly improved as a whole”, notes Alex Kemp, a partner at Ideal Mortgage Advisers, after service levels slowed as lenders received record volumes of business, in part due to the stamp duty holiday.

Virgin Money and Clydesdale Bank have announced their intermediary service commitment will return this month, where customers will receive £100 if they do not receive an offer within 10 days of a fully packaged application being submitted.

But Kemp says his business has seen some delays with larger lenders that have recently been “very aggressive” on rates, amid a sub-1 per cent mortgage rate war. 

Figures from Moneyfacts show the average two-year fixed rate at 60 per cent LTV has dropped year-on-year, from 1.86 per cent in August 2019, to 1.71 per cent and 1.55 per cent in the same month of 2020 and 2021 respectively.


60% LTV

Average two-year fixed rate1.86%1.71%1.55%
Average five-year fixed rate2.23%1.98%1.79%

Source: Moneyfacts Treasury Reports. Data shown is as at the first available day of the month. 

As well as improved service levels and lower rates, lenders are relaxing their criteria for the self-employed, who have seen their mortgage chances adversely affected as a result of the pandemic.

“We’re seeing lenders become a little more relaxed towards self-employed applicants now, however mortgage lenders are still unlikely to accept an application from anyone who received the SEISS [Self-Employment Income Support Scheme] grant within the last three months,” says Kemp.

Natwest, for example, is now accepting applications from self-employed customers who received government Covid-19 support by way of SEISS grants, providing this is not within the three months before the application.