Just three weeks to beat buy-to-let surcharge

Brokers and landlords have been warned that they have just three weeks to beat the new buy-to-let surcharge and save thousands of pounds.

The 3% surcharge on stamp duty for investors doesn't come into force until 1 April but the real deadline is much tighter for investors who need to arrange a mortgage.

Specialist lender Keystone has urged brokers to submit purchase applications for its Classic Range as soon as possible after setting a cut-off date of 29 January to beat the 3% surcharge.

It has refused to guaranteee that all purchase cases will complete within this timeframe, but said it will prioritise applications that are submitted by 29 January. 

Keystone managing director David Whittaker said: “Since the surcharge was announced we have been preparing for an increase in applications, making sure that systems are in place and staff are ready.

“We have also been working closely with our valuers and solicitors to ensure that they too are prepared for what we anticipate will be a very busy period.”

Whittaker said getting purchase applications over the line before 1 April is a priority because it will save borrowers thousands of pounds.

“The deadline will give us a little over eight weeks to take cases from submission to completion.

“In most instances, that will be do-able – even for limited company applications which, because they require a greater underwriting skillset, can take longer to process.”

Keystone calculates that the industry takes 95 days on average to move a case from start to completion.

Now there are just over 85 days to go until the stamp duty surcharge kicks in.

Keystone also wants brokers to help by telling clients how much money can be saved and encouraging clients to respond promptly to all requests for paperwork and information.