• Dean

Budget 2021: What this means for the property market

Stamp Duty

Many homebuyers will be celebrating today, following the news that the stamp duty holiday, which was due to expire on 31 March 2021, has been extended to 30 June 2021.

The extension will help some buyers save thousands of pounds in fees and give the intermediary community more time to help people with their mortgage requirements.

The Chancellor also announced that the stamp duty nil rate band will then change to double the previous nil rate to £250k from 1 July until the end of September 2021, and will then return to its previous £125k rate from 1 October 2021. This tiered system is something I have advocated for since the holiday was introduced. Simply extending to another cliff edge would essentially be kicking the can down the road, with people inevitably being left frustrated, so the tapered end is welcomed. It could perhaps have been phased out in a slower process, but it is a move in the right direction for the housing industry.

The Kent market continues to be buoyant as we still face a lack of supply in housing, as well as people reevaluating their need for space with the new working from home culture. Perhaps people from London and the surrounding areas are relocating to Kent where they can get more for their money adding to the local demand.

Mortgage Guarantee Scheme

Advisers, agents and lenders adjusted to ensure the housing market continued to operate last year, however people with less than a 15% deposit suffered as lenders remained cautious, with a lack of low deposit mortgages available.

The Chancellor has confirmed more details for the government’s plans to launch a mortgage guarantee scheme.

At his Budget speech, Rishi Sunak announced that first-time buyers will get a “government guarantee” on mortgages with a deposit of 5%. The scheme, expected to launch in April, will allow both existing homeowners and first-time buyers to purchase properties up to £600,000.

Many “big lenders”, including NatWest, Barclays, Santander and HSBC, are already backing the scheme, Sunak told the House of Commons.

I am supportive of this scheme as it will help to further stimulate the housing market. This will open up the market to homemovers and more importantly first time buyers who will now have an option to own a home using a 5% deposit.

It will be interesting to see what rates will be on offer from the lenders. We should have further insight in early April, helping people to achieve up to a 95% Loan to Value mortgage.

The new mortgage guarantee scheme is fantastic news for those who have struggled to get a foot on the housing ladder, and with low interest rates and a desire for more space driving an increase in activity, the scheme likely serve to inoculate house prices against the big falls that some were predicting for 2021.

We look forward to continuing to help people achieve their property objectives in the months ahead. Delivering the best mortgage with the simplest process.

Dean - Mortgage and Protection Adviser

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