Mortgage and real estate plans have been hit by coronavirus through 2020, and with a second lockdown on the horizon, consumers could continue to experience disruption for some time. According to expert analysis, this could almost be guaranteed if stamp duty extensions are not made.
The mortgage plans were changed during 2020 as coronavirus and lockdown rules delayed the buying process. To address these issues, the government has adjusted stamp duty rules, raised the threshold, and reduced costs for buyers.
While these stamp duty changes are slated to end in early 2021, support has been called for expanding as England will put in a second lockdown in the coming days.
Richard Pike, Director at Phoebus Software, commented on these changing dynamics: “A second national lockdown could drain the property market unless an extension of the stamp duty leave is agreed.
“The current health of the property market remains strong.
“Although we have previously experienced a national lockdown, we are entering uncharted territory.
“We can’t be sure that this final lockdown won’t jeopardize thousands of sales that are already in the pipeline.
“Knowing that there are already significant delays to completion, the government needs to ensure that those who started the process do not reach the final hurdle due to delays beyond their control.”
While the new lockdown rules will be daunting for many, they don’t seem as harsh as the ones introduced in March and will hopefully only last a month or so.
Martijn van der Heijden, Habito’s Chief Strategy Officer, noted this and explained that certain administrative processes related to housing should thankfully be spared the effects: “The good news is that the property market will remain open during this period, and the Government has asked all to continue to help reduce the spread of the virus by following current guidelines.
“That means you can still move home, craftsmen can still do their homework, and construction sites stay open.
“At the moment it doesn’t look like a repeat of the lockdown in March, when everything in the real estate market ended overnight.”
In the common mood with Richard Pike, however, Martijn called for stamp tax reliefs to be expanded, as delays are now more likely: “Apart from that, it is now more likely that there will be delays in home purchases – for example in submission and real estate surveys, as they are renewed adapt to stricter restrictions.
“This is compounded by the rush of homebuyers who want to be ready before March to benefit from the stamp duty vacation.
“We are now calling on the government to extend the stamp duty leave beyond March 31st to give those affected more security, to ensure stability, to stabilize a nervous market and to avoid numerous real estate transactions being canceled in February and March . ”
Martijn concluded by giving an insight into how new vacation rules can affect mortgages and what customers with difficulties can do to reduce their stress: “If you are about to buy a new house and your financial situation changes in the next few weeks, you have to do so If a new mortgage is unaffordable, lenders have the right to withdraw their offer.
“For example, your offer could be affected when you are on vacation. If you are concerned, speak to your broker or lender about how this could affect you and your mortgage offering.
“If you already have a mortgage, you shouldn’t mind taking vacation.
“But if your income is falling and you need help with monthly repayment, the good news is that the Covid-19 mortgage vacation program has now been extended …
“… Any homeowner considering a mortgage vacation for the first time should know that this is in no way a ‘vacation’.
“The interest will continue to accrue each month and must be paid back to the lender – either at the end of the mortgage or at the end of the vacation with the mortgage payment.
“It’s a great tool for people in need, but if your income is unlikely to be impacted, it is better to continue your payments as usual.”
–
