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In the March Budget, the Chancellor of the Exchequer Rishi Sunak made two housing announcements. The first being an extension of the current Stamp Duty Holiday whereby no tax is paid on the first £500,000 of the house price until the end of June this year. Thereafter no tax will be paid on the first £250,000 until the end of September with tax rates returning to normal from 1st October. This will enable hundreds of thousands of property transactions to benefit from a tax saving of up to £15,000 until the end of June and £2,500 from July until the end of September. The second announcement was the return of Government backed 95% mortgages which will be available from next month. Most high street lenders will be offering these loans from April with others following suit in the coming months. The move is to maintain the housing market throughout the remainder of this year.
The 95% mortgage guarantee scheme, although not exclusively for them, should allow younger first time buyers to make their first steps onto the property ladder quicker and more easily than saving for larger deposits. For example, a couple regularly saving £500 per month to purchase a £200,000 property would typically have to save for over three years to afford a £20,000 (10%) deposit. Under the Government scheme that time can be halved and will mean those who are currently some way off a 10% deposit can obtain mortgage finance much quicker. Despite the winding down of Help to Buy and Help to Buy Equity Loans over the coming years, the reintroduction of 95% mortgages is a credible long-term alternative which can maintain a level of financial support for first time buyers, while reducing the overall burden on day to day Government finances.
If you decide that now is the time for you to move or get a foot on the property ladder, please call our Conveyancing team on 0808 168 5643 or email email@example.com for a quote from our expert team.
March 3, 2021
Lindsey is a Solicitor and Partner and Heads the Residential Conveyancing department.