Welcome to our weekly blog and what an exciting week this has been!
Rishi Sunak’s 2021 Budget has been all over the news and he has provided some welcome help to businesses, hospitality and workers as well as the housing and property market.
Furlough has been extended until September, the national living wage has been increased to £8.91 from April and the self employed will get another grant to tide them over until September if needed. This will include more than 600,000 newly self-employed who previously could not claim. The £20 uplift in Universal Credit will also continue for another 6 months.
All this is great news but obviously the most relevant announcement for us this week was the help provided to the UK housing and property market.
Firstly, the stamp duty holiday has been extended until 30 June which will certainly help those homebuyers presently in the process of purchasing their home. Many transactions have been unavoidably delayed due to the sheer volume of sales, purchases and searches that solicitors and councils have had to deal with so this extension will provide some much needed breathing space for all involved. It may of course cause some delays further down the line with transactions not yet started but will be an added bonus if these new sales are able to complete before the end of the new staggered amounts and deadlines.
Secondly, but probably most importantly, we have the government-backed 95% mortgage guarantee scheme. This is welcome news to all those who have been waiting for the 5% deposit mortgage to come back to the market.
The scheme will be open to home buyers with a five per cent deposit, not just first-time buyers, for properties worth up to £600,000. It has been largely modelled on the previous Help to Buy scheme launched in 2013 to help lenders transition back into the market and is open to ALL properties not just new-build.
Sunak confirmed the UK’s biggest banks are poised to lend on this scheme from mid-April, including Lloyds, NatWest, Santander, Barclays and HSBC, and with Virgin Money getting ready to launch in May.
He said: “To quote the Prime Minister, we will turn generation rent into generation buy.”
So, get yourselves ready for more information coming soon when lenders set out when and how they will offer these mortgages. They have indicated they will offer them through intermediaries (brokers) which will probably mean their criteria for lending may be tough.
Why not contact your local mortgage adviser for more information and in the meantime watch this space for further updates.