Why the end of the stamp duty holiday creates an opportunity for advisers

There is a line of argument that post-Lockdown 1, the market was already revving itself up, but undoubtedly the decision to introduce the stamp duty holiday back in July boosted this to another level.

Look back over recent history and Governments of various hues have used stamp duty in particular to move the market in various directions. There continues to be a lot of talk around just what to do with stamp duty – with some advocating scrapping it altogether – but, given the influence it can have, I suspect this (and future) Governments will be loathe to lose such a powerful market-changing weapon.

Even if there has been some research to suggest that a market without stamp duty would actually deliver greater numbers of purchases and increase the Government’s coffers by an even bigger amount. Although, that would depend on its ability to replenish supply, something this country has not excelled at for decades.

Perhaps that is an argument for another time, but as a consideration stamp duty tends to be right up there in determining the level of purchase activity, and as we’ve seen in recent months, when you’ve been able to potentially ‘save’ up to £15k you might be more inclined to act.

Certainly, in the equity release sector, we’ve felt the benefit of it, in that older homeowners have been much more likely to use lending to provide their younger relatives with the deposit monies they have needed to get on the ladder.

Recent research from Key highlighted this, suggesting that (on average) older homeowners were gifting £42.5k to younger family and friends for use as a house deposit.

But what happens next? As we know the holiday will not last much longer, and part of me believes the market might well have exhausted itself, certainly over the past few months, as the pressure has been increased in order to complete before the deadline.

An interesting addendum to this period, particularly for specialist equity release advisers who have a number of introducer relationships with mortgage advisers, is to think about the level of contact you have had with them recently and how you might now wish to open up those communication channels a bit more.

Certainly, given such a busy period, I suspect some equity release advisers have not wanted to contact their mortgage counterparts too much because of the level of work they have needed to complete. Busy would be an understatement for a large number of mortgage advisers I’ve spoken to.

However, with the deadline closing and perhaps the level of demand tailing off slightly, mortgage advisers may well have more time to look at their current activities and the clients coming up for renewal, and there could be far more leads to be shared with the equity release specialists.

In that sense, now is certainly the time to look after your mortgage adviser introducers because my belief is that, with a bit more time to review what they have, there’ll be a greater focus on pushing leads your way. In a way, after a time spent dealing a lot with cases going through the pipes up to completion, they’ll now be able to bring their introductions more on stream, and those active in later life may well benefit.

Certainly, part of our focus at Air Group is to support firms’ marketing activity in this area, and to provide resource and help to allow them to generate strong introducers and to bring new ones on board.

With the final end of September stamp duty deadline not a million miles away, as an industry we may find ourselves with time to take stock, and I suspect we may be afforded some breathing space to look at our businesses more strategically. Mortgage advice firms will definitely be in that position, and I hope later life practices can reaffirm their commitment to their introducers and make the most of any upturn in leads this can generate.