The March Budget revealed that the Chancellor had provided a further extension to the stamp duty holiday and a new Mortgage Guarantee Scheme to help transform ‘Generation Rent’ into ‘Generation Buy’.
These incentive are agreed by property experts to be beneficial to help more prospective homebuyers onto the property market. Selling agent FHP Living and developer Monk Estates, have shared their latest views on what these new incentives can mean for both young professionals and those intending to downsize.
The deadline for the stamp duty holiday is now 30 June, offering homebuyers the chance to avoid paying stamp duty on properties up to the value of £500,000, presenting a considerable potential saving. After the 30 June deadline, the stamp duty holiday will apply to properties up to the value of £250,000 until the end of September.
Fortunately for prospective homebuyers, this unlocks more opportunities in terms of the scale and types of properties available, according to the experts. Young professionals, first-time buyers and those looking to downsize to a new property can also take advantage of the 95% mortgage scheme, which is due to start from April 2021.
Over the past year, high LTV lending came to a halt as mortgage lenders aimed to maintain service levels and operate in very uncertain times. The new Mortgage Guarantee Scheme hopes to give access to a range of mortgages that many buyers have been able to take advantage of – specifically at 95% LTV.
To facilitate the scheme in the long term, the government offered to take on some of the risk by guaranteeing the remaining portion of the mortgage over 80% should a new homeowner fail to pay their mortgage. This acts as a safety net to lenders – encouraging them to start offering low-deposit mortgages once again, with many high-street lenders stating that they will be some of the first to offer the scheme.
It means that professionals looking to buy a home close to the city, or downsizers wanting to move to a smaller property only have to put down a 5% deposit, going up to a 9% maximum deposit on a new home. The scheme is open to everyone on properties that are going to be the buyers’ main residence up to the value of £600,000.
Steve Parker, director at FHP Living, said: “The stamp duty holiday extension has been met with great optimism and relief from the property industry and would-be buyers – it allows those on the hunt for a new home, more time to progress with their searches and transactions, presenting the opportunity to make considerable savings in the process.
“That, plus the introduction of the 95% mortgage guarantee scheme from April, has opened up the property market to anyone looking to get on the housing ladder for the first time, or for anyone who wants to move to a new home that is more suited to their current lifestyles following lockdown.
“As a leading estate agent, we are proud to market a number of high-quality residential developments in the Nottingham area, as new homes are continually being built.”
Sam Monk, director at Monk Estates, added: “Following an incredibly challenging year for many industries, businesses and the general public, these initiatives will go a long way in keeping the property market buoyant and consistent – supporting the UK economy as a whole and encouraging anyone considering their next property move to take the plunge with these fantastic incentives.”
