The stamp duty holiday has not had an immediate impact on the UK mortgage market in the month since Rishi Sunak’s announcement, according to new data from Trussle.
The online mortgage broker suggested that despite some reports the holiday has fuelled a rise in searches on property portals, the announcement doesn’t appear to be increasing activity further.
Trussle’s analysis found that the situation is “increasingly challenging” for house hunters unable to gather more than a 10% deposit – a bracket that the broker highlighted is dominated by first-time buyers.
While lenders have returned to the market with 90% loan-to-value (LTV) mortgage products, Trussle noted that the overall number of high LTV mortgages still decreased during July.
The broker's data also revealed that mortgage applications for buyers with more than a 10% deposit have remained consistent with levels that the broker had seen before the COVID-19 pandemic, and suggested this demonstrates “little evidence” of a spike in new mortgage activity resulting from the cut in stamp duty. The cut to stamp duty could save buyers up to £15,000 on properties worth up to £500,000.
“There’s been a lot of focus recently on how the stamp duty holiday could be prompting a ‘mini-boom’ in the market,” commented Trussle head of mortgages, Miles Robinson.
“While this is promising, our data suggests that actually the cut is having a minimal impact on buyers’ behaviour and we’re perhaps just seeing a level of pent-up demand following the lockdown.
“We are continuing to see an increase in remortgages from existing homeowners. This may be an indication that many are choosing to stay put and remortgage on their current property, rather than move to another house, despite the stamp duty holiday.
“What is perhaps more worrying, and where we hope the industry focuses its attention, is the diminishing support for those with lower deposits, who are most likely to be first-time buyers. This is a demographic who have traditionally relied on competitive products from lenders to step onto the property ladder.”
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