It is fair to say that we’re all consumed with accelerating a range of property purchases over the course of Q1 and, at the moment at least, it can be difficult to look beyond the impending stamp duty deadline.
When operating in times like these, the importance attached to information, insight and data can really help advisers and businesses to adapt, react and even make tentative plans for the future.
Fortunately, we have an excellent and active trade press that keeps us fully informed about happenings in and around the industry on a regular basis. Inevitably, this has included lots of talk about how to get offers out quickly and transactions expedited where possible, but several commentators have also rightly pointed out that the mortgage world will not stop on 31 March.
The influx of purchase business has obviously dominated the residential and buy-to-let sectors over the past six months and will continue to capture our attention in the coming weeks. However, largely unheralded the remortgage market has ticked along nicely in the background with rates remaining attractive thanks to a raft of competitive lending propositions, especially within the specialist arena.
Five-year anniversary
This is certainly an area that advisers should keep a close eye on. Recent data from Paragon Bank outlined that BTL mortgage brokers were expecting a jump in remortgage business this year as the five-year anniversary of the stamp duty surcharge rolls around.
There was reported to be a significant increase in five-year fixed-rate business written in the run-up to the introduction of a 3 per cent BTL duty surcharge in April 2016 and those deals are due to expire in the coming months. The number of five-year fixed BTL mortgages completed in the six months to the end of March 2016 was said to be 121 per cent higher than in the same period a year earlier, as investors rushed to buy before the new tax hike took effect.
Paragon added that fresh BTL underwriting rules in 2017 had provided a further boost to five-year fixes, which have since grown in popularity, and that around half of advisers were set to turn their attention to remortgage business after the end of the stamp duty holiday.
In addition, brokers surveyed by Paragon had earmarked short-term finance and holiday lets as favourable areas for future business. However, around six in 10 advisers think that case volumes will be negatively affected after the stamp duty break ends.
This data helps highlight that opportunities will continue to arise in the BTL sector and throughout the wider mortgage market beyond March. The stamp duty break has served an important purpose in keeping the wheels of the housing and mortgage markets turning during such a horrendous period for many. And the intermediary market should be looking ahead with some cautious optimism, and positioning as best as possible to grasp ongoing opportunities with both hands over the course of 2021.
Ying Tan is founder and chief executive of Dynamo
