Changes in the new tax year for home buyers
Saving for a house deposit is hard and last year there were fewer low deposit mortgages around because of the pandemic. In the Spring Budget the Chancellor promised to turn ‘generation rent’ into ‘generation buy’ as he announced a new guarantee scheme that aims to incentivise lenders to provide mortgages to people with a 5% deposit for properties worth up to £600,000. This means that 95% mortgages will be back from April in the form of this new government-backed scheme. Lloyds, Barclays, Santander and HSBC have already signed up to the initiative. If you are looking to purchase a property, mortgage advice is one of the areas of financial planning Unividual provides to clients.
The Stamp Duty Holiday has been extended to the end of June also. This means people purchasing a house or apartment up to the value of £500,000 will pay no stamp duty. Within half an hour of the announcement, Rightmove reported that the use of their mortgage calculator jumped by 85%. They also reported that based on the current sales that have been agreed in England, 80% of them would pay no stamp duty due to the holiday. There will be a further extension on homes bought up to a value of £250,000 until the end of September. Stamp duty rates are complicated at the moment so delve a little deeper to find out exactly what you would pay.
On March 31, the current Help-to-Buy scheme, which offers people extra money up-front if they buy a new-build home with just a 5% deposit, is ending. A new help-to-buy scheme has gone live for first-time buyers who can borrow from 5% to 20% (40% in London) of the full purchase price of a new-build home. The current shared Ownership is also changing and the minimum share a buyer can purchase in a home is moving from 25% to 10% at the end of March.