Stamp duty holiday failing to motivate UK mortgage applications

  • Stamp duty holiday announcement has not had an immediate impact on UK mortgage market¹

  • Buyers also not increasing the purchase price of properties despite saving on stamp duty² 

  • First time buyers, with a deposit of less than 10%, risk being locked out of the UK property market

11 August 2020 – One month on from the stamp duty holiday announcement, data from online mortgage broker Trussle has found that the cut has not had an immediate impact on the UK mortgage market. Despite reports that the holiday has fuelled a rise in property searches³, the announcement doesn’t appear to be increasing activity further. Perhaps more worryingly, some groups of buyers face being locked out of the property market due to a number of industry factors.

Trussle has found that the situation is increasingly challenging for those unable to gather more than a 10% deposit - a bracket of house hunters typically dominated by first time buyers. While there have been reports of lenders returning to the market with 90% loan-to-value (LTV) mortgage products, the overall number of high LTV mortgages in fact decreased during July⁴. In addition, lenders are implementing stricter criteria to those with lower deposits who at the same time are also having to cope with rising house prices⁵. As a result, a significant portion of home buyers are finding the home ownership journey challenging and inaccessible.

In contrast, data from Trussle shows that mortgage applications for buyers with more than a 10% deposit have remained consistent with levels that the broker has seen previous to Coronavrius. As such, while there have been reports of surges in properties viewed through online portals⁶, Trussle’s data demonstrates little evidence of a spike in new mortgage activity resulting from the cut in stamp duty.  

Furthermore, there’s no sign that the cut to stamp duty is incentivising buyers to increase the price they are willing to pay for property. The cut to stamp duty could save buyers up to £15,000 on properties worth up to £500,000⁷. This means that the savings from the holiday could allow buyers to look at larger or more expensive properties. However, Trussle found that, since the announcement, those with larger deposits have not significantly increased the prices of the properties they are searching for⁸.  While the reasons for this remain unclear, this does suggest buyers are approaching the market with caution and are hesitant to take on more debt than absolutely necessary during uncertain times. 

In more positive news, Trussle has seen a 30% decrease in application times for both first time buyers and next time buyers with a deposit of more than 10%⁹, when comparing the month before and the month following the stamp duty holiday announcement.

Miles Robinson, Head of Mortgages at Trussle, comments: 

“There’s been a lot of focus recently on how the stamp duty holiday could be prompting a ‘mini-boom’ in the market. While this is promising, our data suggests that actually the cut is having a minimal impact on buyers’ behaviour and we’re perhaps just seeing a level of pent up demand following the lockdown. 

We are continuing to see an increase in remortgages from existing homeowners¹⁰. This may be an indication that many are choosing to stay put and remortgage on their current property, rather than move to another house, despite the stamp duty holiday.¹¹ 

What is perhaps more worrying, and where we hope the industry focuses  its attention, is the diminishing support for those with lower deposits, who are most likely to be first-time buyers. This is a demographic who have traditionally relied on competitive products from lenders to step onto the property ladder. 

At Trussle, we want to ensure that the mortgage process helps everyone feel empowered when embarking on what should be an exciting, hassle-free journey of buying their first home. Getting a mortgage is often one of the biggest financial and emotional commitments a person will make in their lives, and ensuring the industry is supporting young people as they take this step is crucial.”

Trussle has released a guide to help first time buyers understand the mortgage application process and includes information on how to navigate the market during the coronavirus pandemic.


1. Trussle data as of 6 August

2. Trussle data as of 6 August






8. Next time buyers have increased the price of their property purchase by 4% and first time buyers have grown by 0.025% (source: Trussle data as of 6 August) 9. Source: Trussle data as of 6 August 10. Source: Trussle data, accurate as of 6 August 11. Source: Trussle Data as of 9th July

About Trussle

Trussle helps people love their journey of owning a home. We’re the online mortgage broker helping you wherever you are on the ladder.

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In September 2016 Trussle launched an industry-first partnership with online property portal Zoopla, making it possible to find and buy a home in one seamless experience. Trussle is backed by some of Europe's leading technology investors including Orange Growth Capital, LocalGlobe, Ed Wray (founder of Betfair), Ian Hogarth (founder of Songkick), Seedcamp, and Zoopla Property Group.

Trussle is a trading style of Trussle Lab Ltd, which is an appointed representative of Mortgage Advice Bureau Limited and Mortgage Advice Bureau (Derby) Limited which are authorised and regulated by the Financial Conduct Authority.

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