What the budget means for the property market
The much-awaited budget earlier this month addressed two property market issues in the short term at least. The two headline measures were the extension of the stamp duty holiday and the re-introduction of a mortgage guarantee scheme aimed at buyers struggling to raise a mortgage deposit.
The extension to the stamp duty holiday will come as a great relief to those in the process of buying a house. Many will have been worried about completing their purchase before the previous deadline of 31st March. An extension to 30th June will help this group of buyers. It will also benefit new buyers who are in a position to act quickly, so if you are in this position talk to us today.
It should also encourage potential sellers to bring more much-needed stock to the market to help meet the demand from those for whom lockdown has caused a reassessment of their housing needs. Whether you are looking to trade up or down, now is the time to take advantage of this measure.
Until 30 June, the tax-free threshold will be set at £250,000, much lower than the £500,000 currently in place but somewhat higher than the standard £125,000 that we expected it to revert to. Because of the way stamp duty is calculated this will mean the maximum saving enjoyed by buyers will fall from £15,000 to £2,500 on 1st July before evaporating on 1st October.
The second measure, the mortgage guarantee scheme is to support home-ownership. It looks to address the significant challenge of raising a deposit that has faced first-time buyers, particularly since the credit crunch of 2007/08 and the much tighter lending criteria that followed.
This scheme is essentially a rebrand of the Help to Buy Mortgage Guarantee scheme that operated from 2013 to 2017. If it succeeds, it will reduce prospective first-time buyers’ reliance on the Bank of Mum and Dad and Help to Buy.
It will aim to encourage lenders to offer more 95 percent loans to value mortgages on competitive terms for property purchases at or below £600,000. This is good news for first time buyers in Northampton as there are many property options to get them on the ownership ladder.
Our independent financial advisor have some 95% mortgages available already. We expect more lenders to follow suit shortly.