March 31st 2021 probably feels like a long way off, but believe me, it’ll be upon us quicker than we appreciate. Currently, that is the date that the Stamp Duty holiday, or LBTT holiday in Scotland, is due to end. The policy makers are currently viewing this as a hard-stop deadline, this means that to actually make use of the holiday your transactions will need to have completed by this date. As such, you may need to consider getting things moving slightly quicker than you might think or risk missing out. We can hope that the hard-stop deadline may change to a tapered deadline to avoid missing out through delays in the process, at this stage there is no guarantee.
The government’s LBTT holiday has helped to encourage many prospective buyers to move forward and get on the property market, move home, or invest. Time is steadily ticking away now, particularly for those who need to sell in order to purchase. A key part of the process is to speak to a mortgage advisor to help appropriately plan your finances since these professionals understand how to navigate the ongoing changes to the mortgage and homebuying process.
Before the pandemic, a mortgage application for someone with straightforward circumstances could take less than two weeks to move to a mortgage offer. Yet, since the re-opening of the mortgage market, advisers have found that this process is taking much longer – 30% said it is taking three to four weeks with a further 32% saying it is taking four to eight weeks. Lenders are becoming stricter in their lending policies and there are growing examples of buyer’s not getting the loan percentage they had originally been promised. Those with more complex backgrounds, such as those with impaired credit histories or who have been on furlough, may need to allow up to six to eight weeks to get approved for a mortgage.
The majority of Conveyancers will then need an additional 3-4 weeks from the receipt of mortgage offer to the exchange date or ‘date of entry’. In complex cases this can be longer again.
So a very generalised timeline for homeowners that need to sell their existing property might look like this:
- Pre-sale fixes, admin, photography (2 weeks minimum)
- Marketing the property and accepting an offer (19 days: post-pandemic average in Edinburgh)
- Finding and successfully offering in a competitive market (no guaranteed timeframe)
- Getting mortgage approval for the onward purchase (4 weeks)
- Completing the legal work on both transactions (3-4 weeks)
To avoid unnecessary stress I would recommend beginning your property search in the month of November.