Understanding the Key Changes to Stamp Duty

The UK government has announced amendments to the SDLT structure to address housing market imbalances and generate additional revenue. For buyers of second homes and landlords, these changes primarily affect the surcharge on additional properties, which, prior to the 2024 Autumn Budget was 3% of the purchase price.

This has now been written to 5%, making the acquisition of additional properties more expensive upfront. The base rates of SDLT, which are calculated on the purchase price thresholds, will remain in place but will also be subject to broader reforms aimed at lower-value properties.

Notable Stamp Duty Changes:

• Increased Surcharge on Additional Properties: As previously mentioned, the surcharge on second homes and buy-to-let properties will rise, increasing the costs of property purchases for investors.
• Streamlined Reliefs: For landlords purchasing properties under a limited company structure, SDLT reliefs are being re-evaluated, potentially tightening eligibility criteria.
• Changes for properties up to £250,000: The current sub £250,000 zero rate band is reducing on 1^st April 2025 to £125,000 with purchase prices from £125,001 to £250,000 taxed at 2%. This is an effective increase in standard rate stamp duty land tax of up to £2,500.
• Doubling – overall impact of budget changes – example: A £250,000 buy-to-let purchase in September 2024 would have incurred a £7,500 stamp duty land tax bill. From April 2025 the bill will be £15,000.

Impact of Stamp Duty Changes on Second Home Buyers and Landlords

Second Home Buyers

For those looking to acquire a holiday home or a secondary residence, the increased surcharge will require more careful budgeting. For instance, on a property priced at £500,000, the surcharge would increase from £15,000 to £25,000 under the new rules. This change underscores the importance of planning transactions strategically, potentially prioritising completions before the changes take effect.

Landlords

The increased surcharge also affects buy-to-let landlords. Combined with changes to mortgage interest relief and the potential for higher base rates on SDLT, landlords must assess whether their rental income can sustainably offset the higher upfront costs. Many are also looking into property portfolio diversification to balance risk and maximise returns.

Strategic Approaches to Stamp Duty Changes for Buyers

Exploring Product Transfers

If you already own a property and are considering refinancing to fund the purchase of an additional property, a further advance with a mortgage product transfer could provide a practical solution. Further advances can produce additional funds swiftly in the right circumstances. Product transfers allow you to switch to a new mortgage deal with your existing lender, often with reduced fees and faster processing. This can free up equity or lower your current mortgage payments, providing additional capital for your second home.

Limited Company Purchases

For landlords, purchasing properties through a limited company can be a tax-efficient strategy. While SDLT reliefs are changing, limited company structures can still offer advantages in terms of tax-deductible expenses and streamlined inheritance and succession planning.

Consider Offset Mortgages

Offset mortgages allow you to use savings to reduce the interest on your mortgage balance. This is particularly useful for landlords looking to maximise returns on their rental properties while keeping liquidity high.

Navigating Investment Opportunities in a Changing Market

Despite these changes, opportunities remain for savvy investors. Property markets often see adjustments before major policy shifts, with sellers potentially becoming more flexible on pricing. Timing your purchase strategically could help offset the increased SDLT costs.

Furthermore, areas with strong rental demand and growth potential may still provide profitable investment opportunities. Working with experienced mortgage brokers like A Mortgage Now ensures you receive tailored advice to navigate these changes effectively.

How A Mortgage Now Can Help

Whether you’re purchasing a second home or expanding your buy-to-let portfolio, securing the right mortgage product is essential. At A Mortgage Now, we specialise in:

• Buy-to-Let Mortgages: Tailored solutions for landlords, including fixed-rate and variable-rate options.
• Product Transfers: Helping you switch to more favourable terms with your existing lender.
• Mortgage Pre-Approvals: Streamline your buying process with expert assistance in securing pre-approval, giving you a competitive edge in the market

Call us today on 020 8979 9684 for personalised advice and tailored solutions to meet your property goals.

Final Thoughts on Stamp Duty Changes for Landlords and Second Home Buyers

The stamp duty changes coming in 2025 might feel like a challenge, but they’re also a chance to reassess and refine your property plans. With the right strategy and advice, you can turn these updates into opportunities, keeping your investment goals firmly on track.

At A Mortgage Now, we’re here to help you navigate these changes with confidence. Whether you’re buying a second home or expanding your portfolio as a landlord, we’re ready to support you every step of the way.

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100% mortgage for first-time buyers

The No Deposit Mortgage for first-time buyers was launched in May 2023. This is a no-deposit 100% mortgage designed exclusively for those who have been renting and wish to take the first step on the property ladder.

If you are a first-time buyer and have been renting for at least 12 months you can take advantage of this zero-deposit mortgage product with your maximum lending based on the average rent you have been paying.

For example, if your average rent over the last six months is £1000 per month, you could borrow up to £176,627 to purchase your first home without a deposit.

The post No deposit mortgage appeared first on A Mortgage Now.

History of HSBC

HSBC first opened its doors in Hong Kong in 1865.

The bank was founded by Thomas Sutherland, a Scotsman who was working in Hong Kong for a large shipping firm. His aim was to set up a local bank that would support international trade and the bank was launched with the help of 14 of the biggest firms in the Hong Kong business community.

HSBC International Bank now has a strong presence in the UK in business and personal banking and mortgage lending.

You can also find out more about the history of HSBC at their dedicated website – https://history.hsbc.com/

HSBC Mortgage Lending

HSBC are usually a very competitive mortgage lender in the UK market in terms of pricing, making them a popular choice for a lot of borrowers.

Below we have outlined the HSBC Mortgage Criteria which encompasses their key underwriting positions for mortgage business to help you understand if they are likely to offer you a mortgage. The criteria are split into three sections, the first refers to the mortgage applicant(s), the second refers to the type of borrowing, and the third refers to the property to be mortgaged.

Section 1: HSBC Mortgage Criteria for Applicants

1. Applicant(s) age

HSBC Bank will agree to lend to a mortgage applicant from the age of 18 and will take a mortgage application to run up to the age of 80. Where the mortgage runs into retirement, HSBC requires adequate evidence of the applicant being able to maintain the mortgage.

2. Applicant(s) Credit Score

Like most modern banks, HSBC will credit score applicants as part of their mortgage decision process.

HSBC is unlikely to lend to applicants with recent payment problems such as 3 months overdue payments in the last two years, or County Court Judgements over £500 within the last three years.

3. Applicant(s) needing a Guarantor

If you require a Guarantor for your mortgage, HSBC is not a suitable mortgage lender for your circumstances. The reasons why you need a Guarantor may include but are not limited to, having just started a new job, only having a part-time job, or you are currently unemployed. Guarantor mortgages are typically designed for borrowers with a low income who do not qualify for a mortgage on their own.

4. Multiple mortgage applicants

HSBC’s mortgage criteria limit the number of applicants on a mortgage application to 2 total. If you require a mortgage for more than 2 applicants, please speak to one of our mortgage experts who will be able to advise the best mortgage lender for your circumstances.

5. Foreign national applicant(s)

HSBC is a useful bank for mortgage applicants who do not have Indefinite Leave to Remain or Right of Abode, particularly if the applicants are higher earners. HSBC requires foreign national applicants to have a maximum LTV of 75% and the deposit must be from the applicants’ own funds, not gifted.

6. Overseas and Ex Pat applicant(s)

HSBC regularly provides lending to overseas nationals and UK expat customers.

For more information on this, please visit our expat mortgages page.

7. If an applicant is a Portfolio Landlord

HSBC’s mortgage criteria state they do not lend on a buy-to-let mortgage basis to Portfolio Landlords.

If you already have a mortgage with HSBC please visit our page dedicated to HSBC Mortgage Rates for Existing Customers.

Section 2: HSBC Mortgage Criteria for Borrowing

1. Residential mortgage applications with a buy-to-let in the background

HSBC will expect to see rental income on a tax return and will factor in all business costs associated with a buy-to-let for affordability purposes.

2. Non-simultaneous sale and completions

Where the mortgage borrower intends to run two residential mortgages for a short period of time in these circumstances HSBC will run affordability calculations on both mortgage balances and running costs. This rarely makes this a practical option with this lender.

3. Interest-only mortgage

HSBC’s mortgage criteria state that interest-only mortgage applications can be taken up to a maximum 60% loan to value (or 50% for lending over £2 million). They will consider interest-only residential mortgage applications provided the one applicant has a minimum income of £75,000.

4. Porting an HSBC mortgage

HSBC allow existing borrowers to port an existing mortgage product onto a new property provided there are at least six months remaining on the current rate. Read more about porting a mortgage here.

Section 3: HSBC Mortgage Criteria for Property

1. Property with annexes

This is commonly acceptable with HSBC provided the annex is only occupied by a family member or by staff employed in the main dwelling. No subletting is allowed.

Annexes can be a problem if there are separate services or electric meters to the annexe or a separate council tax account.

2. Borrowing for flats

As part of HSBC’s mortgage criteria, applicants are only allowed to borrow up to 85% for flats, or 80% for new build flats.

Studio flats are considered by HSBC subject to the valuer’s comments.

3. Criteria for unusual construction types

• Timber frames – Properties built after 1965 are acceptable for mortgage purposes.
• Wimpey No Fines – can be accepted subject to valuer’s comments to 80% loan to value (please note that some deterioration has been noted in this type of construction, so they are rarely a sensible purchase).
• Steel frame properties – corrosion can affect the frame where there is water penetration, so all mortgage applications with HSBC are subject to structural engineers’ reports and can be no more than 80% loan to value.
• Kit-built properties – This includes construction types such as Huf Haus/Potton/Skandia-Hus. It is possible to obtain a mortgage with HSBC for these builds up to a maximum of 80% loan to value with suitable warranty provision.

4. Borrowing against recently purchased properties

This is possible through HSBC, but not where the mortgage applicant wishes to raise extra funds or there was a sub-sale type transaction on the purchase.

5. Part residential part commercial property

Commercial property can be considered for a mortgage by HSBC, but only as a minor part of the property provided the whole property can be sold as a complete residential unit. This does not include properties such as holiday lets.

6. Multiple kitchens

HSBC’s mortgage criteria state that properties with 2 kitchens can be considered subject to the valuer’s comments.

7. Leasehold properties

Leasehold properties must have more than 30 years remaining at the end of the mortgage term to pass HSBC’s mortgage criteria.

The above covers the most common questions we are asked and the problems we face when trying to secure a mortgage through HSBC for applicants. Should you have further questions or a unique situation and would like to speak to one of our advisors, please call us on 020 8979 9684.

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Search

Use your browser to search for ‘Experian Statutory Credit Report’. This should bring up a link to the correct page in the search engine results. That link looks like this (below). Do not click the ads at the top of the engine results as they are trying to sell you something.

Visit

The front page is set out as below:

Order

Use the ‘order now’ button which will take you to the terms, read the privacy statement, and click the link which says ‘Order your £2 Statutory Credit report Online’.

Request

Complete the order form which requests details that you will know off the top of your head.

Wait

On completion of the form, Experian will send you a letter that contains your ‘Pass Key’ to obtain your credit report (an example letter is shown below).

Prepare

When using the Pass Key to obtain your Statutory Credit Report go to the link specifically provided by Experian by email. This takes you to the correct page. Use the wrong link, or search online, and you may end up on a standard login page for account holders where your Pass Key won’t work.

Log on

The correct login page is set out as below. Use your details to log in.

Download

The login takes you to a simple download page, from here you can easily download your full Experian Statutory Credit Report.

View

Once downloaded, your full report should be anything between 12 and 50 pages long, the front page looks like this.

Uploading your credit file to A Mortgage Now

Go to amortgagenow.wetransfer.com

Read the terms and click the ‘I agree’ button to agree to the site terms before use. You can then see the upload fields.

Use the + Add files section to navigate to your newly saved credit file and select it.

Our notification receipt address of enquiries@amortgagenow.co.uk is already completed in the ‘Add more friends section’.

Enter ‘Your email’ (the one you used when you enquired to us initially). You will then receive an acknowledgement email once our team has securely downloaded your file.

You may wish to add information for us in the ‘Message’ section before clicking the ‘Transfer’ button.

If you have saved your credit file on a shared computer, we suggest you permanently delete the file after use.

Credit reports are published by three main providers in the UK; Experian, Equifax, and Call Credit (Noddle). There will be circumstances where your mortgage broker may ask for copies of all three reports from all three companies. This is because the data on the three reports can vary, and different mortgage lenders refer to different credit report providers.

If we here at A Mortgage Now specifically ask you for an Experian report, you do not need to provide the other reports unless we later specifically request them.

The early pages of your credit report show ‘Your Experian Credit Score’, which is a score out of 999, and these are rated by Experian, for example, ‘Excellent’, ‘Good’, ‘Poor’, ‘Very Poor’. Please note that these ratings are simply a marketing tactic by the credit report providers. The mortgage lender does not make any decision based on the credit provider’s opinion of your credit file.

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