Mortgage Deals UK: How to Include Deals as SDLT Deadline Delays Closing

Rishi Sunak changed the Stamp Duty Property Tax (SDLT) in 2020 as the Chancellor announced that there would be no stamp duty on residential properties up to £ 500,000. From July 1st this threshold will be lowered to £ 250,000.

The impact of this SDLT onslaught has had an impact on both mortgage deals and property prices as everyone involved tries to adjust.

Halifax also released its latest House Price Index report today, showing house prices have soared to record highs.

The average price of a house in the UK is now £ 261,743, an annual increase of 9.5 percent.

James Forrester, CEO of Barrows and Forrester, commented on these numbers, admitting that completing before the deadline could be difficult, but the market itself could benefit beyond that.

He said: “Despite the prospect of a stamp duty saving now unlikely for many homebuyers, the market continues to move fast, fueled by an appetite for home ownership unseen since the financial crisis.

“While the end of the stamp duty holidays is likely to have some impact, it is unlikely to derail a market that continues to flock to buyers on the back of low interest rates and 95 percent mortgage availability.”

That optimism appears to be supported by the newly released data from Moneyfacts, which suggests that product choice has increased as vendors rise to the challenge of meeting borrower demand.

Moneyfacts’ latest Treasury report on mortgage trends showed:

  • The product selection for mortgage borrowers is 4,243, its highest level since the pandemic began, having increased for the eighth month in a row (March 2020, 5,222). Smaller deposit borrowers can be pleased that their options continued to improve, as the highest increase level was 95 percent of Loan-to-Value (LTV), with an increase of 80.
  • Price competition has intensified in some LTV sectors; Some providers have launched flashy deals below 1 percent in the lower LTV tiers and competitive price adjustments were evident in the higher LTV tiers. However, the growth in the number of higher LTV, higher-interest deals and rate increases in the middle LTV levels led to a renewed increase in the total two- and five-year fixed interest averages of 2.59 percent and 2.82 percent, respectively. While these averages are higher than last year when availability was low, compared to June 2019, those looking to ensure the longer-term stability of a five-year fixed rate would like to find that the overall average is 0.03 percent lower now.
  • As the products and criteria change rapidly, the average shelf life of a mortgage deal drops, leaving potential borrowers only 28 days to complete their chosen deal, suggesting that speed and preparation can be key to ensuring they get theirs preferred variant.

Eleanor Williams, a financial expert at Moneyfacts, further broken down these numbers and gave advice on how savers can benefit: “The drive of homeowners to buy more housing and meet the holiday deadline for stamp duty has pushed UK property prices up and down die while The demand for a dwindling supply of real estate continues to grow, and mortgage debt has risen significantly.

“Lenders are responding by improving product choices. There are now 316 more products on offer compared to the previous month, and overall mortgage availability is in the top 4,000 for the first time since the effects of the pandemic began over a year ago. Recently released data from UK Finance saw the highest number of home purchase advances since August 2007 and also showed that first time home buyer advances were the highest on their record at 42,330.

“While availability improvements were seen at most LTV levels, almost a quarter of the new deals started at 95 percent LTV. Over the past month, 33 new biennial fixed income products were launched, with the average fixed rate dropping significantly by 0.14 percent to 3.88 percent – the lowest since the drop to 3.28 percent in June 2020 when The availability had shrunk to just 31 deals. Those aiming for a 5-year fixed rate at this level have launched 27 more product options this month and also saw the average rate drop significantly by 0.10 percent to 4.07 percent. Although these are still around 0.63 percent and 0.40 percent higher than in June 2019, the course seems to be moving in the right direction. The resurgence of high LTV products and the fact that their average prices are starting to drop is particularly good news for first time buyers, especially considering the Nationwide Building Society’s most recent House Price Index report found house prices historically increased by nearly 24,000 GBP have risen year on year which means this 5 percent deposit is now even more difficult to build.

“In addition to changes in the top LTV tiers, interest rate competition has been at the opposite end of the LTV spectrum, with a number of lenders launching flashy mortgage deals below 1 percent in the lowest LTV tiers. These record low interest rates are available to low risk, high equity borrowers, but whether that competition will extend to higher LTV deals remains to be seen as we absorb the full economic impact of last year. For those looking to get a new mortgage contract, seeking advice can be invaluable Affordability and eligibility criteria while remaining fluid. “

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