Chancellor Rishi Sunak has vowed to “protect the jobs and livelihoods of the British people” as the UK emerges from the coronavirus pandemic with a brand new budget plan.
Here at Sophic Property, we’ve been waiting with baited breath for the Chancellor to announce his budgetary plans for 2021 in the hope that it will provide some clarity for the property industry and we think finally we have something to build on at least.
The current Stamp Duty holiday will remain in place until 30 June 2021 – an extension of three months, Chancellor Rishi Sunak has announced. After this date, the nil rate band will be reduced to £250,000 until the end of September, and the usual level of £125,000 will return as of 1st October this year.
Mr Sunak said: “The cut in Stamp Duty I announced last summer has helped hundreds of thousands of people buy a home and supported the economy at a critical time, but due to the sheer volume of transactions we’re seeing, many new purchases won’t complete in time for the end of March.”
The chancellor also announced a new policy that will see the government guarantee mortgages for those who can only afford a 5% deposit. Sunak said that a number of large banks – such as Lloyds, Santander and HSBC – will be offering these mortgages from as soon as next month, with other lenders to follow.
Mr Sunak continued “As the prime minister has said, we want to turn ‘generation rent’ into ‘generation buy’,”. The Office for Budget Responsibility said the new mortgage guarantee scheme “has not been sufficiently specified” to be incorporated in its forecast, however it said there is some evidence that a similar scheme in 2013 “modestly raised transactions”.
Temporary stimuli such as these are likely to encourage every facet of the property industry. With 95% mortgages back on the market and halve the minimum deposit required we will see more first-time buyers and indeed most other homebuyers, who did struggle to save deposits, finally being able to take out mortgages and ultimately buy properties. The move is also designed to help support jobs in the property sector. Mr Sunak said “it’s estimated that 240,000 people are employed by house builders and their contractors, with a further 300,000 to 500,000 people in the supply chain.”
If you are a Landlord or Property Investor you will still benefit from some of the stmp duty extension also – lthough you have 3 months to benefit from the Stamp Duty holiday, it’s critical you get started as soon as possible. The time it takes from application to completion can vary greatly depending on your situation and the type of property you buy. Call us on 0118 324 6850 to get started.
This of course is not the only change that Rishi Sunak has made that affects the property market. There have been a host of indirect announcements, that also impact property sector outlined below;
#1. £5bn relief package will be made available to help High Street firms reopen.
#2. A furlough extension has been announced and will continue until the end of September due to skyrocketing job losses.
#3. Much to the delight of business owners, 750,000 eligible businesses in the retail, hospitality and leisure sectors in England will benefit from an extended 3-month business rates relief.
#4. Also of benefit to local businesses will be news of the increase in contactless card limits from £45 to £100 for public health reasons.
Click here for a full list of announcements from yesterday’s budget. If you’re a landlord and want to understand how to take advantage of the Chancellors stamp duty extension announcement, feel free to contact us to get our expert advice on which properties are the best investment choices. We have many case studies highlighting how we can help in a range of situations.