Stamp duty deadlines and short-term finance
Donna Wells is a director at First 4 Bridging
The recent stamp duty change is great news for borrowers and the mortgage market, but it also opens the door to many questions. Are mainstream lenders ready for such a potential influx of mortgage applications – in terms of risk, appetite and volume? How will this impact higher LTV lending? Will conveyancers be able to cope? What extra impetus will be required for some purchases to complete before the deadline?
31 of March 2021 may seem like a long time away, but we all know how quickly this deadline will come around and how intense this period will prove to be when thousands of pounds of your client’s money is potentially at stake.
Despite all good intentions – as is usually the case when a firm deadline is in place – there’s little doubt that many residential and investment purchases will go right down to the wire.
Meaning that swift access to the right kind of short-term solutions will prove vital in facilitating a range of property transactions in a timely cost-effective manner whilst providing a robust exit strategy.
The residential market is where the vast majority of intermediaries excel and, quite rightly, focus their attention. They know mainstream lending criteria and product ranges like the backs of their hand and have a variety of sourcing systems available to fill in any gaps along the way. However, when it comes to short-term finance, more often than not, this experience and knowledge is found wanting.
This is where specialist distributors come into their own and act as a walking, talking contact-laden sourcing system. They have a full understanding of individual lending criteria to ensure that even the most complex cases can find the right solutions.
And packaging cases in the right way means improved acceptance percentages by lenders, more DIPs being approved and higher conversion rates.
It’s also a fact that many short-term lenders are looking to only deal directly with specialist distributors to ensure cases are packaged in the right way, and correctly fit their criteria.
Despite the stamp duty barrier only just opening, we are less than nine months from it closing, and intermediaries need to be arming themselves with the necessary tools and affiliations to ensure they can support more of their clients’ needs over this period.
For those who don’t already have a relationship with a trusted specialist distribution partner, they need to get one in place sooner rather than later.
For those who already have such a relationship, then it’s a perfect time to review these arrangements to ensure that their distribution partner has the capability, proficiency and professionalism to meet ever-changing client demands.
Don’t leave this until the last minute. Otherwise, those clients who may struggle to complete on time and benefit from the Stamp Duty holiday in full will go looking for alternative sources of advice, or worse still, miss out completely.