Spring Budget: What Does it Mean for Buyers?
At the Spring Budget, Rishi Sunak shared a range of measures to help home buyers. This includes an extension to the stamp duty holiday and the mortgage scheme backed by the government.
Stamp Duty Holiday Extension
Great news for many, the stamp duty holiday deadline receives a three month extension. Prolonging the deadline means more buyers will have the chance to complete sales. An increasing number of people were rushing to finalise purchases before the initial deadline of 31 March. As a result, the crowded sales pipeline faced a backlog of transactions awaiting completion. Over 628,000 sales are currently in the legal process across the UK. The extension will provide relief to all those involved in the process, including mortgage brokers and conveyancers.
If a buyer completes a purchase by 30 June 2021 on a home up to the value of £500,000, they will not pay any stamp duty. After this date and until the end of September, the threshold will rise to £250,000 to ensure a smooth transition after the stamp duty deadline. On 1st October, the figure will return to the usual threshold of £125,000.
Introducing the 95% LTV Mortgage Guarantee Scheme
Buyers with smaller deposits can still step foot onto the property ladder. The new government scheme will launch in April. It will enable buyers to purchase homes up to £600,000 with a deposit of just 5%. The Treasury is encouraging lenders to reintroduce low-deposit mortgages, which were abandoned at the start of the pandemic. Several lenders including Santander, Lloyds, HSBC and Barclays will back the scheme, offering the government-guaranteed mortgages from 19 April.
“We’re delighted to once again be supporting the Government Help to Buy scheme. This scheme will make a real difference in enabling more first-time buyers and home movers, with a minimum of 5% deposit, to get the keys to their new home, and we’re excited to play our part in it.” – Michelle Andrews, HSBC, Head of Home Buying
This scheme will be available for all new mortgages and will run to 31 December 2022. If you’re looking to venture into your first property investment, get in touch with the team today to discuss the opportunities.
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