Despite a small decrease in the average value, prices are 6.3 per cent up on last year. National sales agreed are up 50 per cent annually, with an estimated 650,000 sales going through currently – a 67 per cent increase on last year.

Most indicators point to continuing record sales. Some advisers may end up writing more business in 2020 than in 2019 despite the market having been closed earlier in the year. This is enhanced by the highest-ever house-price values.

However, despite the remarkable trends I am nervous about the immediate future for many advisers, particularly with the looming 31 March stamp duty holiday deadline. A day rarely goes by without a lender worsening its turnaround times and I do not foresee this changing before Christmas.

There are exceptions and I sympathise with most lenders that, in Lockdown 2, are still battling to mobilise and deliver administrative support using disaster recovery plans nobody expected to need. Similarly, law firms are challenged as senior partners, who normally supervise and support junior staff, conduct basic conveyancing tasks with which they are largely out of touch.

Dysfunctional process

Any optimism has therefore been dampened by our dysfunctional cradle-to-grave mortgage process. It is not surprising that L&G Mortgage Club is telling its adviser distribution that mortgage requests will take more than 120 days to complete.

More worryingly, property data firm TwentyCi indicated recently that more than 365,000 applications would miss the stamp duty deadline. The message is simple: if a residential or specialist application is not already with a lender, clients should forget about tax savings of up to £15,000.

But there is a genuine alternative that advisers should consider. The average bridging finance completion time with Crystal SF is just 32 days, and many cases take less than 14 days. Most are either preventing residential chain breaks or offering refinancing to existing bridging facilities where the commitment to exit has not been met.

Alongside the speed benefit there can be cost savings ahead of the stamp duty deadline.

Example of cost differential:

• Client purchase price: £1m
• Buy-to-let loan needed: £455,500 net
• Purchase completes on or before 31 March 2021: £58,750 costs*
• Purchase completes after 31 March: £93,750 costs*
• Not completing before 31 March means £35,000 additional funds are required to complete.

Example of bridging then remortgage solution:

• Assuming 0.55 per cent per month with 1.5 per cent product fee and no exit fee over six-month term**
• £478,755.23 gross loan with fees added and interest deducted delivers a net loan of £455,500**
• Approximate cost is therefore £23,255.23 on the bridging element
• From the outset a remortgage solution is established with 2.99 per cent available on a two-year fixed basis. A 1.5 per cent product fee is charged over the 25-year term, which equates to £7,181.34**
• £485,937.34 is therefore the gross loan and after the lender fee is deducted a net loan of £478,756 is available to redeem the bridging loan facility**. Total costs of £30,426.57 are incurred and this assumes the client takes a bridging loan for the full six-month term. (This could be less as the bridging lender will allow the customer to remortgage onto the BTL product from month 1.)

The result: total potential savings are the difference between £35,000 and £30,426.57, so a bridging solution could save £4,573.43.

*Stamp duty figures obtained from Knight Frank calculator

**All figures obtained from Lendinvest calculator and product guide as of 10/11/2020

Jason Berry is group sales and marketing director at Crystal Specialist Finance