Conservative governments in the past have done much to help home ownership, and this budget is no different. We’ve taken a brief look at what the latest changes mean to the property sector – and it’s good news for first time buyers.
Great news for the property sector, Chancellor Rishi Sunak has confirmed what we were all hoping for: an extension to the stamp duty holiday. It will now continue until June 30th.
This policy has meant that property sales of £500,000 are exempt from stamp duty, and anything over that price will only pay stamp duty on the value above that threshold.
Before the COVID-19 pandemic, stamp duty was held at £125,000 and it won’t now return to that level until 1st of October, according to Mr. Sunak. During the pandemic, the housing market has effectively been driving with the brakes on and without this extension it’s feared that many sales will not be completed.
According to property portal RightMove.com, there have been 412,000 agreed sales during the pandemic. Around one quarter of those are expected to fall through without this vital extension to the stamp duty holiday.
This is a move which will help everyone in the property sector. Right Move estimates that around 300,000 transactions will benefit from the extension (due to last 3 months). This translates into an overall saving for house buyers of £1.75 billion.
That’s not the only good news for house buyers to be announced in the latest budget. There is also the much-anticipated return of the 5% deposit mortgage scheme.
5% Deposit Mortgage Scheme
Before April 2020 there were nearly 400 of the 5% mortgages available on the market. By Feb 2021 that figure had fallen to just 5! (and even those were only available under special circumstances).
In this latest budget, the Chancellor has sought to encourage lenders to start offering the 5% deposit scheme once again. It’s a move designed to assist first time buyers and give the property sector a much-needed boost at the same time.
The new budget will see the government act as a safety net for mortgage lenders. This scheme is very much targeted at helping first time buyers. It will only apply to properties valued at under £600,000.
Full details of how the new 5% deposit scheme will work have yet to be released and borrowers will still have to pass all the usual criteria to qualify.
Pendle Hill Properties can advise you on your next property purchase. Call Toby on 01282 772048 for more information, or contact us online here.