In the recent Spring Budget, Chancellor Rishi Sunak announced that the Stamp Duty extension would continue until June 2021, and that the 95% mortgage guarantee would also come into effect. Both of these are great news for buyers, whether first-time or already on the ladder, and hopefully gives us all confidence in the future of the property market.
What could this mean for you? Allow us to summarise:
In summer 2020, the Government temporarily increased the starting amount at which the tax is paid to £500,000 for property sales. This was due to end on the 31st of March and has now been extended until the 30th of June.
After June the starting rate of stamp duty will be £250,000 and continue at this rate until the end of September 2021. At this point stamp duty will return to its normal rate – i.e. paid on properties sold for more than £125,000. If the property you’ve completed purchase on before June 30th is over £500,000, you will only be taxed on its value above that amount.
If you’re currently finalising buying a house, this will undoubtedly come as a relief. If you’re only at the beginning, don’t fear - with the scheme extended until October, you will still hopefully be saving!
The 95% mortgage scheme is available to all home buyers from April 2021 until the end of 2022 on properties worth up to £600,000. The scheme itself is similar to the old Help to Buy programme which ended in 2016, and enables buyers to secure a mortgage with a 5% deposit with the other 95% underwritten by the Government. Major lenders have agreed to partake in the scheme from April, including HSBC, Natwest, Barclays and Lloyds.
There’s no doubt that the past year has been hard on us all – looking optimistically this is a sign of better things to come.
This news can also hopefully benefit those of you who have bought at auction and will buy in the coming months so please contact us if you have any further questions about how this may impact you. As market leaders in property auctions we are more than happy to help!