Stamp Duty Holiday: UK’s mini-property boom causing a shift away from remortgages

  • New home mortgage applications up by 51% from 2019 to 2020²

  • Gap between remortgaging and moving home has shifted by 14% (in favour of moving home) from 2019 to 2020, as buyers look to cash in on stamp duty holiday²

  • 800,000 homeowners on Standard Variable Rates (SVR) and paying over the odds for their mortgage¹

  • Using a remortgage calculator can help determine if switching could save you money 

8th December - New data from online mortgage broker Trussle has revealed that the stamp duty holiday has caused a marked shift in homeowners priorities, as homeowners move away from prioritising remortgaging to buying a new home. This represents a remarkable turnaround from the beginning of the year, when remortgaging became a focus for homeowners seeking to shore up their finances as the economic climate became increasingly uncertain. 

Trussle’s data shows that more homeowners are moving to a new home (56%) than remortgaging on their current home (44%)², compared to this time last year, where the majority of homeowners were prioritising remortgaging (63%) over moving to a new house purchase (37%)³. As such, the online mortgage broker determined that many next time buyers have been motivated to make the jump to a new home because of the prospect of saving up to £15,000 on a new home purchase and a desire for a larger property⁴. 

Homeowner appetite for remortgaging started off the year strong, with applications in January up 196% month-on-month⁵. While the beginning of a new year is often a popular time to consider remortgaging, the desire to ensure our finances were in order was further fuelled by the coronavirus pandemic, and as the UK entered lockdown remortgage applications jumped 54% during March⁶. 

However, the stamp duty has proven hugely popular with next time buyers and Trussle saw mortgage applications from next time buyers surge by over 73% in June⁷, as reports of a possible stamp duty holiday gained momentum⁸. This interest has only grown and demand has been so strong over the autumn months causing delays in the market, which has resulted in it now taking  around 115 days to complete on a property in England⁹. 

As homeowners’ thoughts appear to have turned away from remortgaging, Trussle is keen to remind people that slipping onto an expensive SVR could increase their monthly outgoings. Previous research from Trussle found that people can save an average of £4,500 a year¹⁰ by remortgaging, which is equivalent to 15% of the UK’s average salary¹¹. Continued low interest rates mean many fixed rate mortgages are competitive, especially for those that have equity in their properties.

Miles Robinson, Head of Mortgages at Trussle, comments: 

“After an uncertain year, it’s encouraging to see house prices rising and the property market moving, with a sustained interest for house moves.

While many homeowners contemplate buying a new home, it’s important to keep on top of your current mortgage and consider remortgage when the time is right. Every year, thousands of homeowners unknowingly move onto a high standard variable rate (SVR) when their mortgage deal ends and their monthly payments can increase considerably. Homeowners can save £344 on average per month by remortgaging, which is a significant sum¹².”

In these unprecedented times, we’d encourage those who are concerned about their finances to keep an eye on their mortgage. It’s worth using a remortgage calculator to see if switching to a better deal could save money.”

~Ends~

Contact

For further information, please contact:

Emily Coyle at [email protected] or Leilah Mackie at [email protected] 

We’ve taken extra care to ensure the information provided within this release is presented in a way that’s compliant with regulatory requirements. If you have any questions about how to repurpose this information or require any further assistance, please contact Leilah Mackie at Trussle.

1. FCA Mortgage Market Study interim report

2. Trussle internal data December 2020 3. Trussle internal data December 2020 4. Trussle external research June 2020 - survey of 2000 adults by Opinium found 32% of Londoners thinking about moving away from the city to get more space. 5. Trussle internal data November 2020 6. Internal month on month figures from Trussle, November 2020 7. Trussle internal data November 2020 8. https://propertyindustryeye.com/government-minister-suggests-stamp-duty-could-be-reviewed-after-coronavirus-outbreak/

9. Source: Data based on how long it took Trussle customers to go from signing up on our website to completing their property purchase over 90 days up until 21 October 2020. This information is for guidance only. 10. Source: This calculation from Nov 2018 is based on average UK house price from gov.uk (£230,630) on a 60% LTV (= £138,378 loan). The SVR figure was collated via whole of market data extracted and analysed by Trussle, which showed average SVR interest payment per year was £6,957.39. Comparing this to best two year fixed interest rate for residential purchases in England at the time was £2,393.94 = yearly savings of £4,563.45 11. Average salary of £30,420 based on median weekly wage multiplied by 52 

https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/annualsurveyofhoursandearnings/2019

12. https://trussle.com/marketing-claims

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