It’s safe to say buyers and sellers alike have been eagerly awaiting the Budget statement on March 3rd. The property industry had many questions, from the stamp duty holiday to the impact of COVID-19. Now, we finally have answers.
Let’s discuss the key elements on the table and how they impact you.
Stamp duty holiday extension – tapered to September
The impact of coronavirus on property has been huge, many are itching to move but weren’t sure where they stand. It’s now been confirmed there will be a 3-month extension to the stamp duty holiday. The new end date is the 30th June, for properties up to £500,000.
The Chancellor was under huge pressure to extend, as thousands of deals threatened to collapse without an extension – buyers would have to potentially find an extra £15,000 if transactions didn’t complete on time.
How does it work?
Many have called for the holiday to be tapered, including our own Phil Spencer – founder of Move iQ. The fears were that without this, it would only cause another cliff edge.
Sales agreed in January, for example, rarely complete by 31st March (the original end date) under normal circumstances. Add in the current delays and nature of conveyancing and the market was threatening to collapse as buyers pulled out of their deals.
Now, the holiday will have a staggered ending. It ends on the 30th June for properties up to £500,000. After that, the holiday will apply to properties costing up to £250,000 until the end of September. After that, the normal rules of stamp duty apply – no tax for properties up to £125,000.
What will happen now?
Rightmove suggests an additional 300,000 property transactions in England can now make it through to completion. This will potentially save buyers £1.75 billion altogether.
95% LTV mortgage guarantee scheme
Many banks pulled their ‘riskier’ loans in light of the pandemic, namely 95% LTV mortgages. This hit the first-time buyer market the hardest, as they don’t have the sale of another property to fund their purchase. The Prime Minister made some loose comments about turning ‘Generation Rent into Generation Buy’ but nothing concrete was put forward – until the Budget announcement.
We now have confirmation there’s a lifeline for first-time buyers, in the form of a new mortgage guarantee scheme.
What is it?
This scheme will require buyers to get together a 5% deposit, and the Treasury will become a guarantor for part of the loan, helping those with smaller deposits get on the property ladder.
- Applies to properties up to £600,000
- These properties do not have to be a new build
- It’s not restricted to first-time buyers alone
It’s set to run alongside the Help To Buy equity loan scheme, which is only for new builds.
Looking to buy a home?
If buying a home now feels feasible, one of the first steps should be talking to a mortgage adviser to better understand how much you can borrow. Getting an agreement in principle will also help you appear a more prepared buyer, and help you start searching for properties you can actually afford.
Need a mortgage quote? Get in touch below – we have over 250 award-winning brokers to match you with!
The number of furloughed workers in the UK rose by 700,000 to 4.7 million in January. After three national lockdowns, many have found themselves in a difficult position.
It’s been confirmed that furlough will be extended until the end of September, which will help both renters and homeowners alike.
This will have far-reaching effects. For example, if renters fall into arrears, this can impact landlords who rely on their rental income. This domino-effect can be disastrous for the economy – hopefully we’ll see less redundancies as we make the transition out of lockdown.
More help for the self employed
Who can now claim the SEISS (self-employment income support scheme)? It is now open to any self employed person who submitted their 2019/20 tax return by midnight on the 2nd March.
This means that anyone who became self-employed last year, can also now claim the 4th and 5th grants. The Chancellor said the extension would bring in more than 600,000 additional people.
The fifth and final grant will be open for applicants towards the end of July.
What’s next for the property market?
Vaccines are being rolled out successfully, and many people are itching to move. This, coupled with the stamp duty holiday extension and a level of pent up demand while people await the news of the budget, will likely mean the property market sees a springtime boost.
The pandemic changed what people want from their homes. With working from home the new normal for many, buyers are now looking for:
- More internal space
- Fast broadband
- Outside space
- Access to green spaces
The criteria for the best places to live has certainly changed, which is being reflected in the housing market.
Demand from homebuyers continues to be high, as people take advantage of low interest dates and favourable mortgage conditions, as well as meeting the new deadline.
Planning to move? Here’s how to get ahead
Whether you’re buying for the first time or looking to sell and move somewhere new, we’ve got you covered. It pays to be prepared, and we’re here to help you get organised and get ahead.
Subscribe to our newsletter for regular tips, industry insights and updates from Phil Spencer.
Looking for a fast, secure way to sell?
Even with the new stamp duty holiday extension, this doesn’t guarantee your house sale will be successful. Many don’t reach completion!
The Modern Method of Auction has a less than 4% chance of falling through. It’s a fast, secure, easy way to sell – with more realistic timescales. Want to discover a different way of selling, that offers the best of both worlds? Find out more about online property auctions below.
Last Updated: March 4th, 2021