Donna Wells, Director at F4B
Have your stamp duty exit plan in place
As a sector which thrives on speed, speed and more speed you would anticipate that the short-term finance sector is in for a busy Q1. To put this into some perspective, recent state of the market data from the Association of Short Term Lenders (ASTL) showed that bridging applications hit their highest ever level in Q3 2020, and completions rose by more than 40% as the market bounced back following the first lockdown. Q4 also proved to be a hectic month for the sector and Q1 2021 looks set to break even more property-related records across many areas of the mortgage market.
If you read too much into the impending stamp duty deadline you might get the impression that the property market will grind to a halt on the 31st of March. This will not happen, but brokers do need to be prepared for a different marketplace. Lots of energy and focus are being spent focusing on this date and some intermediary firms could find that they go from 100mph to 10mph if they don’t think ahead and have their own stamp duty exit plan in place.
This may seem a little excessive and you could well be right. The point I’m making is that brokers need to be thinking about a time when mainstream residential business will not necessarily be beating down their door with such ferocity. Life will be even more complex in 2021 and so will the needs of borrowers.
As always, adversity brings opportunity and we’re already seeing many investors, professional landlords and developers investigating alternative strategies to sure up investments, refinance and take advantage of the opportunities in a world where stamp duty exemptions are no more. And the question brokers should be asking themselves is – are they geared up to deal with the more professional and complex end of the mortgage market?
If not, they could be missing out on a vital ongoing pipeline of business.
The specialist lending market is already a hugely prominent part of the wider mortgage market and this is only likely to grow in 2021 and beyond. Packagers, like F4B, have become a new friend for many brokers in recent times. We’re constantly forging new relationships with introducers to ensure that a variety of short-term solutions are being utilised so that cases can be completed in a timely and cost-effective manner.
And remember, a specialist packaging partner is not just here to help brokers and their clients cope with this stamp duty scenario and get transactions over the line. Our aim is to become an extension of their business over the short, medium and longer-term and help them better service the ever-changing needs of their clients.