Applications for specialist buy-to-let mortgages should be submitted before mid-January to have good chance of completing before the stamp duty deadline of 31 March, according to Keystone Property Finance and Brightstar.
However, lenders have emphasised there could be regional variations in this timeline depending on how valuations are affected by lockdown measures and if case volumes increase.
Warnings are being issued already in the mainstream residential market that prospective buyers should have started the process by early November to be sure of meeting the deadline.
And despite lobbying from conveyancers and other trade bodies for some flexibility, housing minister Christopher Pincher said there would not be an extension to the deadline.
But the specialist buy-to-let sector is not currently suffering the delays and service level issues hitting the residential market.
Ten weeks before deadline
Speaking on the latest Brightstar video debate, Keystone Property Finance CEO David Whittaker said he thought he would start to warn borrowers in the “second or third week of January”.
“It’s probably not in our segment where the pain is, but we could feel the pain going forward. As long as we’re honest with people that’s all we can ask,” he said.
“I think towards the middle part of January we’ll start running up the chequered flag and saying to people, you’re now taking a risk because this sort of transaction will take X number of days.
“Are your lawyers on top of it, if they are we can get there.”
He added that the end of March would be difficult to control for lenders because the transaction was out of their hands as it got closer to completion.
Brightstar CEO Rob Jupp agreed and urged lenders to be clear in their communications on the subject.
“I think mid-January is spot on,” he said.
“I’ve written if you’ve got less than 10 weeks to complete a new transaction in what is historically quite a busy time of year in Q1… there’s a whole part of the process that may not have enough room.”
Bumper year for brokers
Fleet Mortgages distribution director Steve Cox and One Savings Bank sales director Adrian Moloney both agreed there was no need to panic for the buy-to-let sector at present.
And the trio of lenders suggested that 2021 should be a good year for business in the sector even after the stamp duty holiday deadline.
Whittaker noted that along with macroeconomic conditions, 2021 is the five year anniversary of George Osborne’s stress testing rules introduction so there will be a surge in remortgage business towards the autumn.
“It might go a bit flat into Q2, then Q3 should see a bit of a pick-up and Q4 should be as strong a Q4 as we’ve seen in many years,” he said.
Moloney added: “For brokers it’s going to be a big year because people’s circumstances have become more specialist.”
Owain Thomas is features and contributing editor of Mortgage Solutions and editor of Specialist Lending Solutions.
He also has experience in the protection, pensions, workplace benefits and HR areas.
Owain has won two Headline Money Awards and the Protection Review’s Journalist of the Year award.