Landbay managing director, intermediaries, Paul Brett

Last May, house purchase mortgage approvals plunged to just 9,400, the lowest monthly figure ever recorded by the Bank of England. However, by the end of last year, annual approvals were at their highest since 2007, at 818,500.

The stamp duty holiday has been a huge success in bringing life back to the market; so successful that the industry has struggled to cope with buyer demand.

And it’s not just homeowners who were swayed to purchase a new home. Buy-to-let landlords also saw the stamp duty holiday as an opportunity. According to estate agent Hamptons, 15 per cent of agreed home purchases in England, Wales and Scotland in November 2020 were from land-lords — the highest level since December 2016.

That doesn’t surprise me because here at Landbay we have been extremely busy and the last few months of 2020 saw business levels increase month on month. It was business as usual for many landlords whose strategy was to buy property to increase their portfolio.

But we also know that some landlords were influenced by the stamp duty holiday and saw this as an opportunity for growth.

Of course, landlords must still pay the 3 per cent stamp duty surcharge for owning more than one property, but the tax break has made it less onerous. They have either made a saving or could afford a higher-priced property by taking into account what they would have paid if there had been no stamp duty holiday.

There is not enough accommodation in this country and the private rented sector provides a solution to many.

The PRS is not just for those who cannot afford to buy their own home — many people want the flexibility of being able to move as and when they like, perhaps due to work reasons. Rented accommodation is in great demand and BTL investors play a vital role in providing this.

I do not envisage the end of the stamp duty break as being a deterrent to landlords buying more property. The holiday was a stimulus to tackle an unusual situation and it did exactly what it was designed to do.

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ONP chief executive Andy Scaife

The reason for the stamp duty holiday was to kickstart the housing market, but it didn’t need this stimulus. The market was already moving once the first lockdown lifted, first through pent-up demand and then because, with the impact of Covid, people now want to live in different types of property and location because they are looking for more room and outside space. This change is nothing to do with the stamp duty holiday and it will likely continue.

What the holiday has done instead is to compress a high number of housing transactions into a short period. This has put unnecessary pressure across the entire housing and conveyancing industry.

This compressed demand has driven up house prices, which means the stamp duty holiday has also not saved people money. The average stamp duty saving is around £7,000, but house prices are up 6.5 per cent on a year ago, which has eroded the stamp duty saving in most cases.

The remortgage market has also suffered badly as a result of the holiday. The number of remortgages being completed is less than half what it was pre-Covid. The whole supply chain has been so focused on purchases, it has made it incredibly difficult for people to remortgage.

Those who have been unable to remortgage in the usual way have either done a product transfer with their existing lender, because that is ‘easier’ and doesn’t need conveyancing, or have flipped onto variable rates. But that may not be the best for them as it is often more expensive than going to the market and remortgaging.

The stamp duty holiday has therefore had knock-on consequences, which have cost people money that has not been factored in. But hindsight is a wonderful thing.

Now we will face a cliff edge that again will artificially alter the market. There are estimated to be 100,000 trans-actions that will not complete by 31 March. The chancellor will potentially address this in the Budget on 3 March, but it will be too late for many people, certainly for our industry.

What needs to happen now is a tapering of the end of stamp duty that, at the very least, enables people to benefit if they have exchanged, but not yet completed, by the deadline. This will give banks a few more days to transfer the funds necessary to complete the transaction.