No overall extension of the current stamp duty reduced rates period has been announced, albeit the homes England help to buy confirmation of the deadline extension to May 31st, may indicate an imminent overall change.
How does the 2016 deadline compare?
That 2016 deadline does however, provide us with an interesting five year anniversary right now, especially if we are to see purchase activity tail off slightly after the end of March. Large numbers of landlords would have taken five-year deals back then, which will just be weeks away from rolling off.
Even if they took two or three-year products in 2016 and then 2018/2019, it still means that Q1 this year should present a sizeable number of maturing buy to let deals and there’s no doubting that landlord borrowers will be looking to remortgage/transfer where possible so they do not end up moving onto the lender’s reversion rates.
Where are we now?
In a market environment where future purchase activity is slightly uncertain, the remortgage market grows in importance. Indeed, following 2020 where purchasing was a driving force, we could quickly return to a position where remortgaging becomes the bedrock of any advisers’ business again, particularly after those Q1 cases have moved through to completion.
The need for advice is only likely to increase, especially given that there is likely to be a move from mainstream to specialist for many borrowers, plus a complexity to their financial history - because of COVID-19 - that simply wasn’t there before.
As a lender active in these sectors it’s up to us to provide the product ranges and services to meet those changing borrower circumstances, and we’ll certainly be supporting advisers to secure that renewal business throughout 2021.
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