If you were looking to cash in on stamp duty savings, the good news is, the holiday has been extended for a further three months.
Originally, this tax break was due to end on March 31. However, in his Budget on March 3, Chancellor Rishi Sunak made the announcement that it will continue until June 30.
This news will come as a huge relief to the many movers who were worried about sales falling through due to not being able to complete ahead of the initial deadline.
At the same time, aspiring homeowners were given even more to smile about with the Chancellor’s Budget pledge to make low-deposit mortgages more widely available.
Here we take a closer look.
What does this mean?
The stamp duty holiday, announced in July last year, has been a huge help for many buyers, as it has meant there has been no duty to pay on homes costing up to £500,000.
It has also been an important boost to the UK economy.
The problem was, many of those mid-way through the house-buying process had been concerned about the scheme coming to a sudden end on March 31. This put their sales at risk of falling through due to delays in mortgage approvals and conveyancing.
But thanks to the extension announced in the Budget, the holiday will now remain in place until the end of June – giving buyers some much-needed breathing space.
The extension to June 30 will apply in both England and Northern Ireland. Following Sunak’s announcement, the Welsh Government announced the stamp duty holiday in Wales will also be extended by three months.
After that, the tax break will then get phased out between July and the end of September – offering a softer landing as the market hopefully returns to some sort of normality.
What are the key dates?
- The stamp duty holiday will continue in its current form until June 30, with no tax to pay on homes costing up to £500,000
- From July 1 until the end of September, there will be no tax to pay on properties costing up to £250,000
- From October 1, buyers will once again be required to pay the duty on homes costing upwards of £125,000 – the threshold that was in place pre-Covid
How much can buyers save?
- From now until June 30, the maximum you can save as a buyer is £15,000
- From July 1 until September 31, the maximum you can save will fall to £2,500
- To find out how much you could save on stamp duty, head here. For more about equivalent charges in Scotland and Wales read our guide.
Great news for first time buyers
The extension will be especially welcomed by first time buyers for whom a few thousand pounds can make all the difference when stretching for a deposit.
Relief for homebuyers in chains
Homebuyers in chains have also warmly welcomed the extension.
Many had feared that an abrupt end to stamp duty could result in their chain breaking down as purchases failed to complete in time – or as each participant tried to pass the cost on.
These buyers will now be breathing a sigh of relief, as they will hopefully be able to meet the new deadlines.
Act sooner rather than later
While the announcement has given buyers some much-needed good news, if you are looking to move home, it’s advisable to get the ball rolling as soon as you can.
While three months may seem like a long time, mortgage applications are taking longer than usual at the moment. Conveyancers are also extremely busy as they try to keep up with surging demand.
If you plan on starting the process now, you’ll need to quickly if you are going to stand a chance of completing by the new June 30 deadline.
Equally, even if you are already part-way through the process, you still need to be proactive, and do all you can to keep things moving along to ensure you complete in time.
New 5% deposit scheme putting home ownership within the reach of more people
In the Budget, there was more good news for home-movers when the Chancellor confirmed a new Government-backed guarantee scheme which will enable buyers who only have a 5% deposit to get a mortgage.
The Chancellor said the move was about ‘unlocking’ home ownership.
This new scheme is similar to the old Help to Buy Mortgage Guarantee Scheme which closed to new applicants in 2017.
The idea is that by offering a Government guarantee, lenders will be willing to reinstate low-deposit lending which many have pulled due to the pandemic.
It is hoped that 95% mortgage loans will provide a real boost for many would-be homebuyers who were finding amassing a 10% deposit too much of a stretch. That said, the scheme is not about giving buyers a green light to over-stretch themselves. They will still have to pass strict affordability checks.
What are the details?
- The Guaranteed Mortgage Scheme is due to launch in April 2021 – and run until December 2022
- Loans will be available on properties costing up to £600,000
- The scheme is not limited to first-time buyers
- There is no requirement to purchase a new-build home
- Lenders including Lloyds, NatWest, Santander, Barclays and HSBC have all said they are looking to offer 95% mortgages once the scheme starts in April. More are expected to follow suit soon after
- To find out more about 95% mortgages and low-deposit deals, read our guide
What will all this mean?
It is hoped that more help for aspiring homeowners – and home-movers – will be a big boost for both the property market, and also the economy, as a whole.