A tapered extension to the stamp duty holiday and a government-backed mortgage guarantee scheme are among the measures aimed at helping home buyers and sellers delivered by Chancellor Rishi Sunak in the Spring 2021 Budget.

Here is everything you need to know about today’s property-related Budget announcements.

 

Stamp Duty Holiday extension

The temporary stamp duty holiday in England and Northern Ireland has been extended by three months.

The extension means if you are buying a home up to the value of £500,000 you will not pay any stamp duty if the purchase is completed by 30 June 2021.

Then, to smooth the transition back to normal, the nil rate threshold will be set at £250,000 until the end of September, before returning to the usual threshold of £125,000 on 1st October 2021.

The news will be a relief to home buyers and sellers who have been desperately trying to get their sale completed in time to meet the previous deadline of 31st March. 

There are an estimated 628,000 sales in total still currently in the legal process across Great Britain, including those that were agreed last year and those that have been agreed so far this year. 

 

What is the mortgage guarantee scheme?

 

The government has introduced a 95 per cent loan to value (LTV) mortgage guarantee scheme to help buyers with small deposits get on the property ladder. 

The policy had been widely trailed in advance of the Budget but Rishi Sunak has announced more details in the Commons, telling MPs: ‘Lenders who provide mortgages to homebuyers who can only afford a 5% deposit will benefit from a Government guarantee on those mortgages.

Under the new scheme, which launces in April, home buyers will be able to purchase homes priced up to £600,000 with a deposit of just 5%.

The Treasury has said it will guarantee parts of the loans on properties worth up to £600,000 in order to encourage lenders to reintroduce low-deposit mortgages.

Low-deposit mortgages have largely been withdrawn by lenders during the coronavirus pandemic, which meant many first-time buyers have faced raising deposits of 15-20% in order to secure a loan. 

The Chancellor said 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.

For more information, please feel free to contact our experienced sales team on 020 8883 2621 who will be able to advise you on the latest government guidlines.