Joanne Sworder is Head of Property here at our legal department, Woolley Beardsleys & Bosworth. In this post, Joanne shares her summary of the key property-related points from the Chancellor's Budget announcement.
The current Stamp Duty holiday was due to expire on the 31st March 2021. The holiday introduced new rates, reducing stamp duty for everyone and meaning many people paid no stamp duty at all up to £500,000.00. The Chancellor announced today that the deadline has been extended, which means that provided you complete your purchase before 30th June 2021 you will benefit from the reduced rates. This is a move that could save many people thousands of pounds and prevents the cliff edge many buyers found themselves on with the 31st March looming and the possibility of their purchase not being able to complete.
Then nil rate band for stamp duty will then increase to £250,000.00 until the end of September, tapering the return to previous rates, after which we will revert to pre-pandemic rates, so stamp duty will start to be charged at a purchase price of £125,000.00
There will inevitably be debate over the coming days regarding whether this may push up prices, diluting the support aimed at first time buyers.
If you are considering buying or selling to take advantage of the stamp duty holiday extension, do not delay. Property transactions are currently taking much longer than before the pandemic. Contact our property team as soon as possible to discuss your move and requirements.
Whilst not directly affecting the property market, it was announced that the furlough scheme would be extended to the end of September 2021. If you are on furlough and in the process of buying a property, you must inform your mortgage lender and solicitor of the change of your circumstances. Some lenders will allow the mortgage application to continue and the purchase can complete. However, some will wish to pause the process until your employer can confirm you will return to work.
If you are in any doubt, please speak to us.
A new mortgage guarantee from the Government to mortgage lenders was also announced. If the buyer can only afford a 5% deposit, the lender will be able to offer a 95% mortgage, receiving a Government guarantee to protect them against losses due to the high loan to value. Lenders including Lloyds, Natwest, Santander, Barclays and HSBC will be offering 95% mortgages from next month, with more lenders expected to follow.
This policy is designed to “give people who can’t afford a big deposit the chance to buy their own home” and forms part of the Prime Minster’s plan to move from “generation rent to generation buy”.
It is still important to remember that you will need to prove that any mortgage you apply for, regardless of the loan amount, is affordable for you and your circumstances. Speaking to an independent mortgage adviser can be key to obtaining the best mortgage rates for your circumstances. Our Mortgage Specialist, Alex Lynott, is on hand to discuss your mortgage options and make sure you receive the best deal. Give her a call today.
We're proud to say that our team of experts are on top of the Budget changes and can answer any questions you have relating to how they also impact you or your business. Why not drop us an email with your query?
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