Budget 2021 Revealed: Big Impact to Homeowners and Buyers

The Budget tax measures have now been outlined by Chancellor Rishi Sunak which included announcements of big impact for the property sector.

We’ve seen the stamp duty holiday is due to be extended and 95% government-guaranteed mortgages are coming from April, for 18 months.

Below we’ve detailed exactly what this means to you as a homeowner and buyer;

The stamp duty holiday has been extended

The announcement will undoubtedly be welcomed by buyers looking to purchase a home in England and Northern Ireland whom otherwise would have been liable to pay stamp duty should the extension not have been continued.

Essentially, what this means to you as a homebuyer is that the level at which the stamp duty is charged has currently been raised.

  • On properties up to £500,000 the stamp duty holiday will be extended from March 31st through to June 30th.
  • From 1st July, the holiday will apply only to properties up to £250,000 until the end of September.
  • Pre-Covid stamp duty thresholds are due to resume their normal and expected levels from October.

Buyers can currently save up to £15,000 until the end of June. Thereafter, lower rates will be offered from July through to the end of September. It’s yet to be stated whether these dates will end with a gradual approach to prevent disappointment to buyers or not.

With the average house sale taking up to 4 months this extension is likely to cause a surge of activity with buyers and sellers wanting to take advantage of the savings.

The UK Government ‘Plan for Jobs’ scheme has stimulated the market

The UK Government has been focused on protecting, supporting and creating jobs across the country and its scheme, ‘Plan for Jobs,’ which commenced as of July 2020 has seen a 20% increase in property transactions, alongside homeowners wanting to reportedly spend the savings on improvements around the home.

The stamp duty holiday has certainly stimulated the market and increased spend, therefore offering a huge support towards job retention and demand in specialist services.

What you can do: Look to plan ahead and build in time

Bearing in mind home transactions are now taking 16 weeks on average to complete it’s worth planning ahead and building in time by; instructing an experienced agent as soon as possible, getting your offers agreed in good time, having all of your paperwork complete in advance, getting a mortgage agreement in principle and having your EPC certificate completed as soon as you can to take advantage of the extensions.

95% Government-guaranteed mortgages launching April 2021

The chancellor has also confirmed that there will be 95% government-guaranteed mortgages available from April 2021 on the purchase of properties up to the value of £600,000.

  • The launch of the government backed mortgage guarantee scheme was created to assist those with a 5% deposit to buy a home.
  • The scheme is available for 18 months until December 2022 and with the governments guarantee will encourage lenders to offer 95% mortgages once again.
  • The scheme is available to new and existing homeowners and it applies to all properties new and old up to the value limit of £600,000.
  • Rates available will be with the stipulation of having a regular income, good credit rating and proof that you can comply with the monthly repayments.

In order to access the scheme, you will need to approach one of the participating mortgage lenders or find a mortgage broker who can help you to find your best option.

The good news is that this helping hand from the government will bring more confidence to lenders and assist many buyers that found the availability of low deposit mortgages virtually disappeared due to the economic impact of COVID-19.

We know that buying and selling a home can appear challenging and quite the process and with that in mind we are always on hand to talk you through the current regulations in place and to keep you informed of any changes to ensure a smooth and safe move for you.

We have been expertly helping homeowners to move in Burnley, Nelson, Colne, Pendle and the surrounding areas since 1928 and understand that a home is more than just a home to our customers. If you need advice, would like to register as an applicant or would like a valuation then please reach out and call us directly on 01282 860606 or send us an email. To see our available properties, click here.

Posted in