The Bank of England Money and Credit statistics, revealed this week, will add pressure on the Government to extend or modify the March 31 deadline for the Stamp Duty Land Tax (SDLT) holiday.
That's according to Jonathan Sealey, CEO of specialist short term lender Hope Capital, who says record-breaking numbers will continue to put pressure on the sector, and also on power-brokers.
Mortgage purchase approvals increased further to 105,000 in November, up from 98,300 in October to the highest figure seen since August 2007, according to the latest statistics. The Bank says the recent strength in approvals has now “almost fully offset the significant weakness earlier in the year”.
There were 715,300 house purchase approvals up to November 2020, close to the number during the same period in 2019 (722,000).
And Sealey says that although another record month in mortgage approvals for November is a real positive for the housing market, pressure will inevitably mount for the holiday to continue as the deadline approaches. He said:
"To see that the strength of activity has almost fully offset the significant weakness earlier in the year demonstrates how powerful the incentive of the stamp duty holiday has been."
“However, it is also likely to add to more pressure on the Government to extend or modify the March 31 deadline for the SDLT holiday. It will also add to pressure on the conveyancing sector as each month they deal with record-breaking numbers of purchases."
“That’s why specialist and short-term finance will play a critical role in the coming weeks, as that pressure increases with buyers hoping to complete their purchase before the end of March. Buyers and brokers need to look at alternative ways of getting the deal over the line at speed, and the specialist finance sector is in a position to make that happen.”
Meanwhile, Andrew Montlake, managing director of mortgage broker, Coreco, said he thought that the number of mortgage approvals had a reached a 13-year high because of people’s desire to take advantage of the Stamp Duty holiday. He added:
“The closing stages of 2020 were among the busiest we’ve ever been as a broker. That looks set to continue in the first quarter, too, ahead of the looming Stamp Duty deadline.”