Even though there have been many industry observers predicting the stamp duty holiday would be extended until the end of June, it will be a comfort for buyers to have this news confirmed.
With many buyers running the risk of missing out on a saving of up to £15,000 if there was no extension, this is a boost for all parties in the property market.
The March 2021 Budget has also seen an announcement offering support to buyers who can only afford a modest budget.
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Extension offers relief to buyers
The Chancellor, Rishi Sunak, has announced an extension of the stamp duty holiday until June 30th.
Following this date, £250,000 is the nil rate band level until the end of September.
On October 1st 2021, the nil rate band will return to the previous £125,000.
The additional three months of the stamp duty holiday will provide comfort for buyers and vendors whose property deal was still in the process of being completed.
Many would-be buyers were concerned at the thought of having to pay the full stamp duty to complete their move. In some cases, this would add £15,000 to the price of buying a home. This rate applies only to home buyers in England and Northern Ireland. There are different schemes in place for property buyers in Scotland and Wales. It will be up to those nations to decide if they wish to follow suit or offer a similar scheme.
In his own words, Rishi Sunak said; “I can announce today the £500,000 nil rate band will not end on March 31, it will end on June 30. Then, to smooth the transition back to normal, the nil rate band will be £250,000, double its standard level, until the end of September - and we will only return to the usual level of £125,000 from October 1”.
Initial thoughts from industry observers
Buying agent Henry Pryor said: “There will be a new cliff edge — it will just move from the end of March to the end of June. There will be a whole new load of people who will be wailing and gnashing their teeth because they could not get their deals over the line by June 30.”
Responding to the stamp duty extension, Francesca Carlesi, the Co-founder and CEO of Molo Finance, said; "The extension is a responsible move by the Government. Not only is it necessary to ensure market resilience and sustain the UK economy, but it is also welcome from a micro perspective too, with many consumers breathing a sigh of relief. The pandemic has dramatically impacted all of our lives and steps such as this are vital for us to rebuild.”
Mortgage guarantee scheme to be implemented
The Government will provide additional support for people looking to purchase property with a 5% deposit. This scheme will be available to first-time buyers and existing homeowners. The scheme will be available for property purchases for up to £600,000.
In Parliament, the Chancellor said; “Lenders who provide mortgages to homebuyers who can only afford a 5% deposit will benefit from a Government guarantee on those mortgages. ’m pleased to say that several of the country’s largest lenders including Lloyds, NatWest, Santander, Barclays and HSBC will be offering these 95% mortgages from next month, and I know more, including Virgin Money will follow shortly after.”
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