Getting on the property ladder is hard work at the best of times. A year on from the start of a global pandemic and we are all seeking space, style and a place to truly call our own. Luckily, there has been some good news for first time buyers that’s worth sharing of late. In their pledge to move from ‘Generation Rent’ to ‘Generation Buy’, the government has pulled not one, not two, but three seemingly sensible initiatives out of the bag in a bid to quicken the shift.
The three initiatives combined result in some seriously significant savings, which may mean you are able to make that move a bit earlier than you imagined, or aren’t as reliant on relatives to help you. Here’s a quick run down on what’s currently on offer:
Stamp Duty Holiday Extension Until June 2021
Extended for a further three months, the Stamp Duty holiday will now benefit buyers completing in the first half of 2021. Zoopla has estimated that 46% of house sales in England to the end of September will benefit from full or partial stamp duty exemption and benefit from tax savings of up to £15,000.
Source: Extension of the temporary increase to the Stamp Duty Land Tax nil rate band for residential properties. Published 3 March 2021
The chancellor also confirmed during his budget announcement that following 30th June, stamp duty holiday exemption will be kept at double its standard level (£250,000) until the end of September, and then return to its current level (£125,000) from 1st October.
If you are looking to complete on your first home after 1st July 2021, then as a first time buyer you will be able to claim some continued relief on stamp duty land tax on properties up to £500,000. From this date you won’t pay stamp duty on £300,000 of the purchase, and you will pay just 5% on to portion from £301,000 to £500,000. If your property is over £500,000 then these rules don’t apply and you fall into the standard bracket of other homebuyers.
95% Mortgage Guarantee
5% mortgages disappeared as fast as our freedom did last March. But in a radical bid to persuade lenders to offer 95% mortgages again, from April, the government will provide a guarantee to lenders who offer mortgages to people with a deposit of just 5% on homes with a value of up to £600,000. As part of the scheme, the government has told lenders they must offer a five-year fixed-rate deal so borrowers can lock their repayments at a set level for the medium term.
The scheme will allow more ‘creditworthy’ households to become homeowners, and entice those with a smaller deposit. Many lenders will be offering 95% mortgages from April, so if you are hoping to make your move between now and the end of 2022, be sure to waste no time in getting your credit rating in tip top condition.
Source Gov.UK
New Help To Buy Scheme 2021
The Government has announced a new Help to Buy scheme to run from April 2021. It is restricted to first-time buyers and includes regional property price caps to ensure the scheme reaches people who need it most. There are no changes to the current Help to Buy equity loan scheme which runs to March 2021.
The new scheme will run from April 2021 to March 2023. As with the current scheme, under the new scheme, the government will lend buyers up to 20% of the cost of a newly built home, and up to 40% in London.
Source: Gov.UK
Is it time to get packing?
If you are looking to take advantage of the incentives currently on offer to first time buyers, then why not talk through your options with Tony and see how much you can afford to spend on your dream first home before you start looking? Make an online mortgage appointment in an instant and meet at your convenience.
Your home may be repossessed if you do not keep up repayments on your mortgage. Our range of processing and administration fees, payable on application, should you ask us to arrange your residential or buy-to-let mortgage is £395.