UK Budget 2021- Extended Stamp Duty Holiday and 95% Mortgages
Last week, the government confirmed plans to cover the risk of 95% mortgages by introducing a guarantee for lenders.
The news was announced by Chancellor Rishi Sunak when delivering the much-anticipated yearly budget that included further coronavirus support in the form of extended furlough and access to grants for the self-employed, sharp rises in corporation tax, and restart grants for shops and businesses in England that were forced to close due to the pandemic.
According to Mr. Sunak, several of the country’s largest lenders, including Santander, Barclays, HSBC, NatWest, and Lloyds, will be offering 95% mortgages from April.
Going forward, it is expected that many others, including Virgin Money, will be joining the list.
The policy has been put into place in an attempt to shift away from a generation of renters and toward a generation of buyers.
There has been a positive reaction from certain brokers within the industry, with it said that support for buyers was needed with it being so hard for first-time buyers to save up enough to get onto the property ladder and that lenders needed this assurance to reintroduce the 5% mortgages that had been rumoured.
Also included on the budget was confirmation that the stamp duty holiday on properties valued under £500,000 is being extended until June 30th at which point the nil rate stamp duty threshold will be lowered in stages. First, the threshold will drop to £250,000 from June 30th to the end of September and then will return to its usual level of £125,000 from October onwards.
According to Mortgage Solutions, no longer than thirty minutes after the budget was announced, property website Rightmove is said to have seen a 16% increase in traffic, and activity on Property Portal’s Mortgage Calculator rose 85%.
This shows that the announcement made an impact and it is likely that excited first-time buyers will now be reaching out for advice, but with products yet to hit the market and the update still so new, there are few specific known at this point.
First-time buyer, Help to buy, help-to-buy, right to buy, right-to-buy
Purchases, life insurance, first time buyer, property, mortgage, mortgages, mortgage advice, mortgage
References
https://www.bbc.co.uk/news/uk-politics-56266773
https://www.mortgagestrategy.co.uk/news/government-confirms-plans-to-guarantee-95-mortgages/
https://www.mortgagesolutions.co.uk/news/2021/03/03/brokers-give-thumbs-up-to-95-per-cent-ltv-government-backed-mortgages/
https://www.mortgagesolutions.co.uk/news/2021/03/03/buyers-flock-to-rightmove-after-sunak-reveals-help-for-homebuyers/