Great News for the Housing Market in Today’s Budget
3rd March 2021
Stamp Duty Holiday Extended
Last summer, the government temporarily increased the lower limit at which stamp duty is paid until the end of March 2021. The limit increased from £125,000 to £500,000, handing buyers a potential saving of up to £15,000 on property purchases. Over the last few months, the housing market has been busy with the Stamp Duty incentive driving sales and increasing the average time to completion. With the spectre of the deadline looming at the end of March and around 160,000 home sales currently underway, the fear that many uncompleted sales could fall through, collapsing chains or leaving movers in limbo, has caused a degree of nervousness and uncertainty for sellers.
In today's budget, Chancellor Rishi Sunak announced that the government would extend the holiday until June 30th. The tax break will be phased out, with the limit dropping to £250,000 after this date until the end of September, when it will return to £125,000. Landlords and second-home buyers are also eligible for the tax cut but will still have to pay the additional 3% of stamp duty they were charged under the previous rules.
"Today's budget announcement will give significant reassurance to buyers," says Simon Taylor, Managing Director of Autograph Homes. "The March Stamp Duty deadline was causing a great deal of uncertainty, so today's budget announcement is very welcome news for those with property sales underway as well as for the housing industry as a whole".
What does the Stamp Duty holiday extension mean for me?
If you're currently selling or buying a property worth £500,000 or more, then the Stamp Duty holiday should be very welcome news. Property sale completions are taking slightly longer than pre-pandemic times, so if you're in the early stages of planning a move, then there is still time, although not much, to plan a move and complete before the June deadline. If this is a critical consideration in your move, you should talk to your sales agent and solicitors to discuss your completion date's feasibility. Buying a new build home can be a great way to ensure that your house move won't hit any unexpected bumps in the road. At Autograph Homes, we have a limited number of homes that are available for immediate occupation. Please talk to our sales team today if you'd like to find out more.
Good News for First Time Buyers
There was good news for those looking to take their first steps on the property ladder with the announcement of a mortgage guarantee for buyers with a 5% deposit. With rising housing prices over the past year coupled with some market uncertainty due to the ongoing pandemic, there has been a steep reduction in the number of 95% mortgages available. Today, the government moved to underwrite some of the uncertainty of these mortgage products, and lenders, including Lloyds, NatWest, Santander, Barclays, and HSBC, will offer mortgages on these terms from as early as next month. While more detail may emerge on this announcement, it is to be hoped that this scheme will provide another opportunity for buyers with a smaller deposit to take advantage of homeownership opportunities.