Help for home buyers in the spring budget
When you see the Chancellor of the Exchequer holding up the iconic red box, you know it must be budget day. It’s a tradition that’s been going on since William Gladstone was presented with the first red box in 1860 – and Rishi Sunak has just followed in his footsteps.
After a year that none of us expected, and the pandemic meaning that government borrowing sky-rocketed to £270bn, it was hard to predict what the budget might hold. But it was a relief to see some good news for home buyers, with the Chancellor saying he hoped to turn ‘Generation Rent into Generation Buy’.
Stamp duty holiday
First introduced in July 2020 and due to expire this month, Rishi Sunak has extended this perk for a further three months. It means that if you’re buying a home up to the value of £500,000, you won’t pay any stamp duty. You just need to ensure your purchase is done and dusted by 30 June 2021.
After that date, there will be a phased return back to normal. The nil rate threshold will be set at £250,000 until the end of September and then go back to the usual rate of £125,000 on 1 October 2021.
This is sure to be a huge relief to many homebuyers who were frantically trying to get over the finish line before the stamp duty holiday ran out. Says Tim Bannister, property data expert at Rightmove:
“Our recent data shows one in five sales that were agreed in the same month the stamp duty holiday was first announced in July last year still haven’t completed, so this additional time will make a big difference to help those stuck in the logjam complete their purchase in time before the new end of June deadline.”Tim Bannister – Rightmove
Mortgage guarantee scheme
The government announced a new scheme designed to help buyers get onto the property ladder, even if they can only afford a small deposit. Due to launch in April 2021, the mortgage guarantee scheme means you can purchase a property up to £600,000 with only a 5% deposit. Mortgages issued under the scheme will be backed by the UK government. That means if you couldn’t pay back what you’ve borrowed, the government would financially support the lender to help cover their losses.
It’s a move designed to encourage lenders to bring back low-deposit mortgages, after many were withdrawn during the pandemic. The Chancellor said that many of the big lenders including Santander, Lloyds, Barclays and HSBC, are backing the scheme and will be offering ‘government guaranteed’ mortgages from next month.
If this news has got you thinking about whether you might have a chance of getting on the property ladder, speak to us at Logical Mortgages and we’ll let you know for sure. Get in touch….
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