How to Beat the Stamp Duty Holiday Deadline

How to Beat the Stamp Duty Holiday Deadline
Home Blog How To Beat The Stamp Duty Holiday Deadline
Pete Mugleston

Author: Pete Mugleston

Mortgage Advisor, MD

Updated: March 18, 2024

Stamp duty relief helped reinvigorate a stalled property market when the nation emerged from the first national lockdown last summer. But with the original deadline of March 2021 looming large, the mortgage industry struggled to cope with the influx of people scrambling to complete in time for a hefty discount, and countless buyers were at risk of missing out.

Although the deadline has since been extended, there’s bound to be a similar stampede of customers for mortgage lenders to contend with when the new cut-off point approaches.

If you’re planning to apply for a mortgage in the coming months, the thought of failing to complete in time for that discount might fill you with dread, but we’re here to allay those fears. In this blog post, you’ll learn how to save precious time on your mortgage application and wrap it up long before the stamp duty holiday comes to an end.

What is stamp duty relief?

Stamp duty is a charge that you pay to the taxman when buying land or property in the UK worth over a certain amount. Before the tax holiday, this was being charged at between 2% and 12% if you were buying a residential property costing more than £125,000.

The stamp duty holiday means that property buyers pay no stamp duty on the first £500,000 of the purchase price, when buying in England or Northern Ireland. These measures were unveiled by chancellor Rishi Sunak when the nation first emerged from coronavirus lockdown last summer, with an original deadline date of 31st March, 2021.

An influx of buyers scrambled to beat the deadline, but between the backlog this created and inevitable delays caused by the latest national lockdown, many were at risk of missing out on the discount. In response to this, the chancellor announced an extension to stamp duty relief, alongside the mortgage guarantee scheme, in his 2021 Spring Budget.

When has it been extended until?

The stamp duty relief has been extended until the end of June 2021. After this date, the usual rates will be gradually phased back in over the course of a few months. The nil rate band will be set at £250,000 – double its normal level – until the end of September this year.

How much is stamp duty normally?

Stamp duty is usually charged at between 2% and 12% of the property’s purchase price. The exact percentage you’ll owe is based on the value of the property, the date you bought it, and whether you’re a first-time buyer, homemover or multiple-property owner.

The threshold when this tax is payable was set at £125,000 before the freeze was introduced. It is due to revert to this threshold after 30th September, 2021.

The tables below outline how much stamp duty is payable for each price band under normal market conditions, which are due to return on 1st October…

Stamp duty rates for a main residence

Property Price Band Stamp Duty Rate
£40,001 to £125,000 0%
£125,001 to £250,000 2%
£250,001 to £925,000 5%
£925,001 to £1.5 million 10%
Over £1.5 million 12%

Stamp duty rates for a buy to let or a second home

Property Price Band Stamp Duty Rate
£40,001 to £125,000 3%
£125,001 to £250,000 5%
£250,001 to £925,000 8%
£925,001 to £1.5 million 13%
Over £1.5 million 15%

In addition to the rates shown above, there are specific rates for first-time buyers coming in on 1st July, 2021. They will be exempt from stamp duty on properties priced at £300,000 and under. Anything with a purchase price of between £300,001 and £500,000 will be charged at 5%, and here will be no exemption for properties valued higher than that.

Does the relief apply to buy-to-let properties and second homes?

Yes. The stamp duty relief on the first £500,000 of a property’s purchase price applies to all residential properties, including buy-to-let premises and second homes. One tax you won’t avoid on these properties, however, is the extra stamp duty surcharge introduced in 2016.

This will set you back an extra 3% for properties in England and Northern Ireland (4% in Scotland and Wales) in each stamp duty band. So, rather than paying absolutely nothing on the first £500,000 of the purchase price, you’d still have that 3% charge to foot.

Is there a stamp duty freeze in Scotland and Wales?

Scotland’s equivalent of stamp duty is Land and Buildings Transaction Tax (LBTT) and relief for this was announced as part of the support package north of the border. However, this temporary reduction to LBTT is set to end as planned in March this year.

The Welsh government, meanwhile, has extended the stamp duty relief until the end of June but there will be no tapered return like there will be in England and Northern Ireland.

How to prepare for a fast-track mortgage application

If you’re planning to apply for a mortgage in the coming months, you might end up in a race against the clock to meet the new stamp duty relief deadline. If this is the case, you obviously can’t waste any time, so here are some tips to help you complete a mortgage application as quickly as possible and boost your chances of landing that discount.

Gather the necessary documents

You will need to provide documents to prove your identity, address, deposit funds and your income. Having these ready in advance can save you precious time in the long run. A full list of the documents needed for a mortgage can be found in our mortgage application guide. 

Download your credit reports

It’s a good idea to download and pore over all of your credit reports, so you can see what the lender will see when they take a look into your financial history. This is important because it can forewarn you of any credit-related issues you might face and give you the opportunity to fix any outdated or incorrect information in your file.

Download all of your credit reports

Close any inactive accounts and join the electoral register

Making yourself as eligible as possible for a mortgage can help you boost your chances of first-time approval, and there are small steps you could take ahead of your application that might make all the difference. Closing all inactive accounts and joining the electoral register (if you haven’t already) would be a good start, as this can boost your creditworthiness.

Use a mortgage broker

Speaking to a mortgage broker before you apply is the best way to ensure your mortgage application is swift and smooth. There are countless ways that their expertise can save you precious time throughout the process. Jump ahead to the next section to find out more…

How a mortgage broker can help you beat the stamp duty deadline

The average residential mortgage application can take around 12 weeks from start to finish. This timeframe might be longer if there are any added complications, such as bad credit, complex self-employed income or a non-standard construction property.

If the stamp duty deadline is approaching and you’re banking on that discount, it’s unlikely that you’ll have much time to spare, but using a mortgage broker will give you the best chance of completing your mortgage application in time to qualify for the relief.

Here is how the right mortgage broker can shave time off your application…

Finding the best product for you

Tracking down suitable mortgage deals takes a lot of legwork. The market is vast and you won’t have time to pore over online rates tables and contact mortgage lenders directly if the stamp duty deadline is fast approaching.

A mortgage broker is the perfect remedy for this problem. They have access to the entire market and will know exactly which lenders to approach on behalf of a customer with your needs and circumstances. They will have a list of the best products that you qualify drawn up in no time, and can offer you bespoke advice about which one to choose.

The right lender, first time

Being rejected by a lender whose criteria you don’t fit could be a knockout blow to that stamp duty discount. If you were to approach the wrong lender and were turned away, you might not have time to put a second application together in time for the deadline.

But by using a broker with the right knowledge and expertise, you can rest assured that you’ll be matched with the right lender first time. Not only will this save you time, it could also save you money and prevent you from ending up with marks on your credit report.

Optimising your credit report

A mortgage broker can help you make sure your credit report is in the best possible shape before you apply for a mortgage. They may offer practical tips, such as paying off any debts you’re in a position to settle and correcting any outdated information on your credit file, and can match you with the right lender based on the shape of your credit reports.

Negotiating on your behalf

Negotiating a deal with a mortgage lender can draw the process out, which is less than ideal when you’re on a deadline. But a mortgage broker will take the lead on these negotiations on your behalf, and might even be able to lock down a better deal.

This service will also be worth its weight in gold if your lender declines your application and there’s grounds for appeal. A broker could renegotiate with them and keep things on track.

Sharing the paperwork burden

Not many people enjoy paperwork, especially when there’s a mountain of it and a tight deadline to meet. Mortgage applications come with a lot of documentation to complete, but that’s not such a big deal if you enlist the help of a mortgage broker.

They can help you complete all of the paperwork so you breeze through it as quickly as possible. What’s more, you can rest assured that your paperwork will be complete free of errors. Even the smallest admin error can delay or even derail a mortgage application.

Short on time? Speak to a mortgage broker today!

If you’re hoping to complete a mortgage application in time for the stamp duty relief deadline, your best option is to speak to a mortgage broker. The right advisor can help you shave heaps of time off the application process and guide you through every step of it.

We can help you find the perfect expert for you through our free broker-matching service. It will take your needs and circumstances into account and pair you up with an advisor who has the right skillset to get you a mortgage approved as quickly as possible.

Call us on 0808 189 2301 or make an enquiry and we’ll set up a free, no-obligation chat between you and your perfect mortgage broker today.

Maximise your chances of approval, whatever your situation - Find your perfect mortgage broker