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Buy To Let landlords are undeterred by the looming stamp duty holiday deadline and intend to continue purchasing rental properties beyond 31 March, a survey by Foundation Home Loans has revealed.

Research by the intermediary-only specialist lender has revealed of the 16% of landlords who said they were going to purchase over the next 12 months, 48% said they would do so in Q1, 41% in Q2, 28% in Q3, and 29% in Q4.

Landlords were able to pick more than one quarter if they were unsure when they might complete.

The landlord research – undertaken by BVA BDRC and carried out between December and January with the results based on 846 online interviews – also found landlords seemed confident about their ability to complete purchases before the deadline. Only 14% said they would abort their transaction if completion did not look achievable.

Of those landlords intending to purchase in Q1, 65% said they were very or quite confident they would complete by the 31 March.

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Extending the deadline

When asked whether they believed the government would extend the deadline, 28% said yes, while 31% disagreed, although the questions were asked before the recent Parliamentary debate on the stamp duty holiday.

There has been growing industry support for a tapering of the deadline to allow those already within the purchase process to complete beyond the deadline date but still secure the tax saving.

Only 4% of those surveyed said they were purchasing because of the availability of the stamp duty holiday. Meanwhile, 25% of those intending to purchase in 2021 said they were holding off buying as they believed property prices were currently inflated.

The most recent house price index from Nationwide for January revealed that prices had dropped slightly by 0.3% month-on-month, and annual house price growth had slowed from 7.3% to 6.4%.

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Foundation’s research suggests landlords will look at slight house price drops throughout the year as an opportunity to add to portfolios.

George Gee, commercial director at Foundation Home Loans, said: “As we know landlords think long and hard before adding to their portfolios and, as our research reveals, they are unlikely to just confine any purchase activity to the first quarter of this year in order to simply benefit from the stamp duty holiday.

“There are a number of positive results to come out of our exclusive research, not least landlords’ continued intention to keep on purchasing after the deadline has passed, and the news that many landlords will not abort their transactions if there is no extension and they look unlikely to complete by the 31 March.

“In that regard, the next month-and-a-half are very important for the sector. Foundation has put in place significant extra resources to our completions team in order to ensure we can complete as many cases as possible by the end of March.

“Looking beyond Q1, there will clearly be ongoing opportunities for advisers active in the landlord borrower space, and all the signals point to significant activity taking place in both the purchase and remortgage sectors.

“We should not forget that many landlords’ special rates are coming to an end over the months ahead, especially those that bought prior to the last stamp duty surcharge increase for additional homeowners back in Q1 2016.”

Foundation relaunched its entire buy-to-let product range last month, with rate reductions across the board, and last week launched new Limited Edition two-and five-year fixed rates with reduced fees for those landlords purchasing or remortgaging via a limited company vehicle.

Source: Mortgage Finance Gazette

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