04 March 2021
All eyes were on Rishi Sunak yesterday afternoon (March 3rd) as he laid out plans for the UK’s finances in the 2021 Budget.
As the Chancellor stood up to face Parliament, one burning question was on the lips of estate agents, landlords, homeowners and buyers across the country – how will this affect the property market?
With some exciting announcements on the agenda, we’ve rounded up everything you need to know.
Stamp duty holiday extended
After the first wave of the stamp duty holiday successfully bolstered the property industry, the Chancellor has announced that it is to be extended until the end of June 2021.
The holiday was originally implemented back in July 2020 after lockdown took its toll on the property market, with viewings only operating virtually and the number of completions plummeting. While the market is slowly but surely building back up, the Chancellor has announced that the holiday will remain in place to support buyers who might have taken a financial hit due to the pandemic.
So, what does the extension mean for buyers? Well, anyone purchasing a home worth up to £500,000 before the end of June will no longer have to pay the tax, giving them a potential saving of up to £15,000 – music to the ears of those scraping together deposits and funds!
After June, the nil rate band will decrease to £250,000 until the end of September – though this is still double the standard stamp duty tax level of £125,000. Rishi Sunak told MP’s this extra step was to “smooth the transition back to normal” and that we would only return to the usual level from October 1st, 2021.
With the extension now confirmed, those in the process of moving will no longer have to face an anxious ticking time-bomb over whether they will complete before the deadline. Sellers can rest easy knowing their buyer isn’t going to pull out, while the move will provide support to buyers in line with the Government’s ‘Generation Buy’ agenda.
Mortgage Guarantee scheme
Aimed to give first time buyers a hand up the property ladder, the new Mortgage Guarantee scheme will bring back low-deposit, 95 per cent mortgages, which had virtually disappeared during the pandemic.
Most mortgage lenders will only offer a maximum of 90 per cent loan-to-value, which means buyers have to find the remaining 10 per cent to pay a deposit. This shift has made it difficult for many first timers to buy their first home, especially in more expensive areas, as they struggle to pull together enough money for a deposit.
Several big-name lenders such as Barclays, Lloyds and Natwest are already on board with the scheme, which will be available to buyers from April this year until December 2022.
The good news is that these mortgages won’t just be available to first time buyers – all those purchasing a property up to £600,000 can benefit from the scheme, with the option to fix the mortgage rate for at least five years.
For more information on how the stamp duty holiday and Mortgage Guarantee may affect you and your move, get in touch with our team on email@example.com / 01642 677411 or firstname.lastname@example.org / 01642 363345.