Date Published 22 March 2021
UK Government Spring Budget Good News For House Buyers
Chancellor Rishi Sunak announced his Spring budget earlier this month, and there were two key points that signalled good news for those looking to purchase a home in the near future.
With details emerging of a new mortgage guarantee scheme and the extension of the stamp duty holiday, many who are in the process of purchasing a home or who are hoping to get onto the property ladder soon will breathe a sigh of relief for this extra support.
Here, we break down exactly what the announcements mean and how that could help you on your property purchasing journey.
New Mortgage Guarantee Scheme for Homeowners
One of the announcements was a new mortgage guarantee scheme which will be available to house buyers from next month. From April 2021, the government will guarantee 95% mortgages to those with a 5% deposit.
When the pandemic first hit, banks withdrew nearly all of their 95% mortgages, leaving many hopeful home buyers priced out of their first property. The new scheme has been designed to encourage banks to start lending again, as the government takes on some of the risks involved.
The idea has been compared to the Help to Buy mortgage scheme, which was available between 2013 and 2016 and helped over 100,000 house buyers to purchase a property.
If you're interested in applying for the scheme, it will be available for both first-time buyers and those already on the property ladder (although it must be your own home - second homes and buy-to-lets are not permitted under the scheme).
Properties - including both existing houses and new-builds - up to the value of £600,000 are included.
The scheme is projected to run until 31st December 2022, although it will be reviewed before this date. Full details on the scheme and eligibility are available now over on the Government site.
Stamp Duty Holiday Extended Until End of June
Rishi Sunak has also responded to concerns that many would be priced out of the market if the stamp duty holiday was to end on the initial deadline of March 31st 2021.
He has now extended the tax break for an extra three months, meaning that home-buyers will not pay stamp duty on the first £500,000 of any home purchase until 30th June 2021.
This will mean that those looking to buy a property will have the opportunity to save up to £15,000 if they complete the purchase before the deadline.
To avoid a sharp downturn in the property market when the scheme comes to an end in the summer, the Chancellor has also lowered the threshold for purchase prices at which buyers pay stamp duty to £250,000 until September 2021.
Rightmove estimates that between July and September this year, around 45% of all properties in England will now be exempt from stamp duty.
The standard lower stamp duty amount of £125,000 will then be introduced in October this year.
More information is available over on the government website.
Marshall Property Are On Hand to Help
If you're looking to sell your existing home or purchase a new property, Marshall Property can assist every step of the way. With over 30 years' experience in the housing market in Liverpool and the Wirral, our team of friendly and knowledgeable agents can find the perfect property for you. Get in touch today.
