Every Spring the government unveils its Budget for the UK economy which maps out where money will be allocated for the year ahead. For buyers this year, the Chancellor made two particularly significant announcements.
The biggest news of the day for all house hunters was the extension of the Stamp Duty holiday introduced last year – a measure that will save all buyers significant sums when purchasing their next home. The government also announced something known as the 95% mortgage guarantee which has the potential to help many aspirational buyers own their own home. So let’s take a closer look at these two policies and explore how they could help you.
Stamp Duty Holiday Extension
Before the initial Stamp Duty holiday was announced in 2020, first time buyers were already entitled to relief for the first £300,000 of a home – up to the value of £500,000 – but they would still have paid Stamp Duty on the remaining property value. For those further up the ladder, Stamp Duty payments came without any relief, and would equate to thousands of pounds in additional fees. As an example, this would mean paying £7,875.00 for an apartment priced at £357,000 – money which buyers can now keep in their back pockets.
The extension of the Stamp Duty holiday is great news for all buyers – wherever you are on the property ladder – and will undoubtedly be welcomed by many who are house hunting currently.
95% Mortgage Guarantee
A 95% mortgage guarantee…what does it mean? Quite simply, this policy is a brand new low-deposit mortgage initiative, which will enable borrowers to secure a property with just a 5% deposit. The new mortgages will be available from April this year, until December 2022, and will be guaranteed by the government – removing the risk for the bank or lender.
The policy is expected to be particularly helpful to those who aren’t first time buyers and wouldn’t be covered by the current Help To Buy Scheme. But this announcement is for everyone, and any buyer can use this new mortgage for a property up to the value of £600,000! This is good news for buyers as they now have a wide range of options available, making a new home purchase more affordable.
If you’d like to know more about the Stamp Duty holiday or how the 95% mortgage scheme could help you, speak to our fantastic team. We’re here to help with any questions you have – from purchasing your new home, to what life is like here in Croydon at Leon House. Why not get in touch and see how your life could change for the better in 2021. Who knows, maybe you’ll be sitting in your very own apartment sooner than you think!