95% Mortgages & a Stamp Duty extension rumoured in the latest budget
What can we expect in the Chancellor’s 3rd March 2021 budget?
In large, the chancellor Rishi Sunak will look to boost the UK economy to high levels in 2021. With the loss of growth and impacts of COVID hitting many businesses, it helps all of us if there is an economic boom. Last but not least, it helps the tax coffers grow as the more money that circulates means there’s inevitably more tax being paid. But what specifically will Mr Sunak focus on?
Well… there’s been plenty of rumours flying around about what will be announced. Specifically, he is looking to boost the property market. As property is directly connected to many jobs, a lot of income and makes up a big portion of the GDP, it’s key to have our industry doing well. The property market is often linked to the overall strength of the British economy so it’s no wonder he wants to give it a boost.
But how exactly can be boost the economy? Well, let’s dive into two of the most popular leaks below.
5% deposit government backed mortgage scheme
If you re-wind to a time pre-COVID, there were 95% loan to value mortgages readily available. Since COVID hit and lenders withdrew lending only to drip feed it back, they have been non-existent. We have only just seen the re-emergence of decent 10% deposit schemes. Before this, 10% deposit schemes could be seen at very high interest rates as not a lot of lenders were offering them.
The Chancellor wants to help lenders back into this realm as he knows that a lot of first time buyers and potential mortgagees have had their savings depleted by COVID. With most of us back to work or in new roles, this hopefully means better times for all of us. But in the meantime, it’ll be tough to get a mortgage as 10% isn’t cheap with the average property price being around £250k. A scheme to this end could see first timers and movers savings up to £12,500 on a deposit and bring a fresh batch of buyers to the market.
An extension to the stamp duty exemption deadline
The times has reported that Mr Sunak will extended the stamp duty exemption deadline by three months till the end of June 2021. This extension will hope to ease the strain currently being felt by conveyancers all around the country. The extension does make a lot of sense. Many people have left it until the last minute with their property purchase. This could mean a bottleneck of completions and inevitable some will fall through. The negative impact on the economy of this mass fall out of purchase would be devastating.
A three month extension would be welcome news to the property industry. It would give these current purchases time to complete and everyone some breathing space. Needless to say it could also welcome a second surge of hopeful purchasers that weren’t ready in the initial six month break. All round it will be great for the market and will mean we should avoid the potential crash of masses of purchases, sales and chains falling through because of not hitting the deadline.
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