Yesterday, Wednesday 3rd March 2021, the Chancellor of the Exchequer announced the new measures and plans coming into place over the next few months. Amongst the announcements which included the extension of the Furlough scheme until September and a cash injection to aid in the covid-19 vaccinations, were plans that directly relate to the housing sector.
Changes are coming for stamp duty and for mortgages and we break down what that means below!
Stamp duty is a tax that is payable on the purchase of any residential property or land. The new plans for stamp duty mean the tax is only payable if you are buying a property that is over £500,000 before June 30th 2021. This means that many first-time buyers, buyers who are moving up the ladder won’t pay any stamp duty.
Those buying over the threshold of £500,000 will pay tax on the amount OVER £500,000. So for example, if you are buying a property for £575,00 the breakdown is as below:
So the total amount on stamp duty on this purchase would be £3,750.
After June 30th 2021 the threshold will drop to £250,000 and will remain that way until the end of September. The breakdown of the thresholds is below:
In October the rates will return to:
This does differ slightly for those who are buying a second home. You will pay stamp duty on a property costing over £40,000, paying 3% on the excess. For example, if the second property you are buying is £180,000 it would be as below
So the total amount of stamp duty on this purchase would be £4,200
If you are buying a second residence and intend to sell your main residence within 3 years of this purchase you are able to claim a refund for the stamp duty tax.
For months there have been no low deposit mortgage products available from mortgage lenders, However, plans for the government to guarantee the returns of the 95% mortgages were also announced yesterday. 95% mortgages mean more first time buyers are able to get a foot on the property ladder. This is absolutely terrific news, not just for buyers but for the property market in general. More buyers and movement at the bottom of the ladder means more movement further up!
Mr Sunak announced the government will offer incentives and underwrite these 95% mortgages on properties worth up to £600,000. With several major banks reportedly on board already, we could expect to see these mortgage products as soon as April. Whilst this is good news, low deposit mortgages do currently have high-interest rates. It is always a good idea to speak with a financial advisor for further information about what you could afford.
All the above is great news for the housing sector and those looking to buy or sell in the near future. The future can still feel a little uncertain at times, but it is very encouraging to see these plans being put in place and hopefully what is a safe return to normalcy!
We’ve been busier than ever in our office over the last few months and these measures are sure to create even more suitable buyers, so if you were debating a move this year, there has never been a better time! You can reach the office on 01704 512121 or at email@example.com
We are still offering free of charge, no-obligation, face to face or virtual market appraisals. The safety of our clients and Team Tinsley is of paramount importance to us and we can confidently operate knowing we are using PPE, regularly getting tested, and adhering to the government guidelines.
If you’ve got questions about selling or buying or would just like a piece of mind. Don’t hesitate to contact us, with over 250 years of combined experience we’ve seen it all! We’ve got the knowledge, the expertise, and the can-do attitude to get you moving.
All content © Chris Tinsley January 2021 Estate Agency Websites Powered by
ECT Consultancy Services LTD trading as Chris Tinsley Estate Agents, 12A Anchor Street, Southport, Merseyside, PR9 0UT
Registered office: 6-8 Botanic Road, Churchtown, Southport, PR9 7NG. Registered in England and Wales.
Company Number: 05388167. Managing Director Mr E C Tinsley.