The Stamp Duty holiday deadline is approaching, and lenders and brokers must manage borrower expectations, says Intermediary Mortgage Lenders Association (IMLA).
Since September 2022, buyers of homes priced up to £250,000 have not had to pay Stamp Duty.
This will change in April, when the threshold returns to £125,000 and the first-time buyer (FTB) exemption up to £425,000 also ends.
According to the IMLA, buyers who did not start their mortgage applications by the end of October face the risk of increased costs.
Following the Budget confirmation with no extension of current rules, FTB demand rose significantly, leading to potential delays.
Land Registry staff have threatened strike action from 21st January, raising concerns about further delays in title transfers.
Many conveyancing firms are prioritising cases based on mortgage expiry dates to avoid complications with new mortgage deals and the Stamp Duty deadline.
Lenders are also checking their pipelines to keep cases moving.
Brokers are urged to contact clients at risk of missing the reduced Stamp Duty cut-off, preparing them for possible higher costs.
Robert Sinclair, chief executive at the Association of Mortgage Intermediaries, said: “The end of any homebuyer incentive inevitably distorts the market for a period and results in disappointment for those who miss the cut-off point.
“Managing mortgage borrowers’ expectations is of primary importance at such times as these. Brokers and lenders are working hard to complete on as many affected cases as possible before 1st April, but there will no doubt be many which don’t beat the deadline.
Sinclair added: “While no-one wants to be the bearer of bad news, it is better to have a well-informed client prepared for potential higher buying costs than one who is both disappointed and surprised.”
Kate Davies, executive director of the Intermediary Mortgage Lenders Association, said: “Lenders are just as keen as brokers to ensure as many customers as possible can complete on their property transactions ahead of April 1st, but congestion at the conveyancing stage is a real issue, and some borrowers will bear the brunt of higher Stamp Duty as a result.
“Industrial action at the Land Registry will not help when it comes to transfer of title post-completion, particularly with those less routine cases which cannot be dealt with via an automated process.
“It is more important than ever that we keep the lines of communication open between lender, broker and borrower in the weeks ahead.”
