Two of the mortgage industry’s trade bodies are urging brokers and lenders to manage borrower expectations ahead of the approaching stamp duty deadline.

The Association of Mortgage Intermediaries (AMI) and the Intermediary Mortgage Lenders Association (IMLA) suggested that there has been an uptick in first-time buyer demand since last October’s Budget, exacerbating an “inevitable bottleneck” as April approaches.

Since September 2022, buyers of homes priced up to £250,000 have been exempt from paying stamp duty. This will revert to previous levels from 1 April, when the duty will be payable on homes priced above £125,000. The threshold has also been raised for first-time buyers since 2022, with no stamp duty payable on homes priced up to £425,000. That exemption is also set to disappear on 1 April.

With the average property transaction currently taking an average of five months (151 days) to complete, buyers who did not kick off their mortgage application before the end of October face the potential of higher stamp duty costs.

“The end of any homebuyer incentive inevitably distorts the market for a period and results in disappointment for those who miss the cut-off point,” said chief executive at the AMI, Robert Sinclair.

“Managing mortgage borrowers’ expectations is of primary importance at such times as these. Brokers and lenders are working hard to complete on as many affected cases as possible before 1 April, but there will no doubt be many which don’t beat the deadline.”

With staff at the Land Registry also threatening strike action from 21 January over the requirement to return to the office three days a week, the two trade bodies also warned that delays to the transfer of title could also be exacerbated.

“Industrial action at the Land Registry will not help when it comes to transfer of title post-completion, particularly with those less routine cases which cannot be dealt with via an automated process,” added IMLA executive director, Kate Davies.

“It is more important than ever that we keep the lines of communication open between lender, broker and borrower in the weeks ahead.”

---