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UK Market: What the Chancellor’s Announcement Really Means
Wednesday was a good day for the property market!
With all the good news it’s understandable some people were left confused. That’s why we’re here, to make everything make sense.
Stamp Duty HolidayÂÂÂ
Last July the Stamp Duty Holiday was introduced meaning the first £500,000 spent on a property will be tax-free. This could save up to £15,000 which is enough to make anyone smile.
The Wednesday announcement extended this Stamp Duty Holiday by three months, until June. In addition, Rishi Sunak announced that until 30th September, the threshold will be reduced to £250,000 before returning to the usual £125,000 on October 1st, 2021. This is excellent news for those who started a purchase and were struggling to complete it before the original March deadline.
To make things even clearer, here is a breakdown of the current stamp duty rate:
Up to £500,000 – no stamp duty
£500,000 to £925,000 – 5%
£925,000 to £1.5m – 10%
Above £1.5m – 12%
Hopefully now it all makes sense.
Government-backed Mortgage Guarantee
Now the stamp duty holiday wasn’t the only good news Wednesday’s budget brought!
Rishi Sunak announced a Government-backed mortgage guarantee scheme. It will allow buyers to apply for a mortgage with only a 5% deposit, as long as the property is under £600,000.
This 95% scheme opens up in April and is promised to run until the end of 2022. It must be not-interest only meaning it is on a repayment basis. After buyers have been credit checked and meet standard rules, they can buy their dream property with only 5% deposit.
The announcement caused a surge across all real estate websites, with websites such as Rightmove experiencing record highs. The scheme includes some of the world’s largest lenders such as Lloyds, NatWest, Santander, Barclays and HSBC.
The government hope this announcement will surge property purchases, which for us in the home staging industry is a sign our help will be needed now more than ever. These two announcements have been the ideal news for the housing industry, us home stagers, those looking for a new home and even real estate agents to developers! Such good news can be confusing but with everyone cleared up, let the excitement begin.
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