Budget Announcements Affecting Property
Following announcements by the Chancellor, Rishi Sunak, buyers and sellers can breathe a sigh of relief that the Stamp Duty holiday has been extended to the end of June.
This means the 300,000 or so transactions that were predicted to be affected by the March deadline now have the opportunity to complete and take advantage of the benefit of the relied offered.
Stamp Duty Holiday Extension
The Stamp Duty holiday, which came in summer 2020, meant that any purchase up to a value of £500,000 for anyone who did not own other property attracted no Stamp Duty. This saved many people thousands of pounds which was otherwise unaffordable for them. The Stamp Duty holiday extended the existing reliefs in place for first time buyers who paid no stamp duty on property up to £300,000. Everyone else who had already owned property only benefitted from paying no stamp duty on the first £125,000, provided the purchase was their only property.
At the end of June, the relief for purchases up to £500,000 will come to an end. However, the Chancellor has announced that the previous benefit of relief on the first £125,000 will now be doubled to £250,000, meaning many can still benefit from reduced Stamp Duty payments compared to this time last year.
From 1 October 2021, reliefs will come to an end and the rules in place prior to 8 July 2020 will resume.
Mortgage Guarantee
The Chancellor has also announced a new Mortgage Guarantee which is a government backed guarantee provided for lenders to allow them to offer 95% mortgages to borrowers who only have a 5% deposit. Many lenders withdrew 95% mortgages with the onset of coronavirus (COVID-19), significantly impacting first-time buyers who will no doubt be pleased with this announcement. Coupled with the extension to the Stamp Duty holiday, this gives a much needed boost.
The following lenders have already signed up to this new scheme: Lloyds, Natwest, Santander, Barclays Bank.
However they will only be offering these products from 1st April 2021, so anyone hoping to get a head-start on a purchase to take advantage of the extension to the Stamp Duty will find they have to wait.
For legal support surrounding the Stamp Duty holiday extension or Mortgage Guarantee, please contact Christina Le Riche in our Residential Conveyancing team on 02076650929, or complete the form below.