Our Residential Sales Director Tony Wing looks at what Chancellor Sunak’s budget statement has brought for our home buyers and sellers.
The Chancellor has announced in the budget this afternoon ‘a tapered extension’ to the Stamp Duty holiday.
- Up until 30 June 2021, ‘no stamp duty’ will be charged on a residential property bought for up to £500,000. This will cover the majority of home purchases in the UK.
- Thereafter until 30 September 2021, no stamp duty will be levied on a residential property bought for up to £250,000.
- The up to £125,000 nil rate tax band will return on the 1st October.
This good news will certainly help save thousands of transactions across the UK which have been at risk of falling through due to the log jam in the market created by the previous 31st March deadline, Some are already suggesting it will also help to reduce the chance of another cliff edge predicament later this year, providing the housing market with the best opportunity of thriving in the long term. However, others in the industry are suggesting this approach is still kicking the can down the road for a troubled autumn market? We shall see.
The chancellor has also announced that first-time buyers, as well as existing homeowners, will receive a “government guarantee” on mortgages, with a deposit of 5% on purchases up to £600,000. In other words, we are seeing the return of the 95% mortgage. It is expected that many of the major mortgage lenders will back the scheme. Sunak has expressed a desire to see first-time buyers move from being ‘Generation Rent, into Generation Buy’.
Many property investors were expecting the Chancellor would increase or suggest that an increase in Capital Gains Tax rates was on the way. However, he was strangely silent on this matter. Whilst many were relieved he has taken no action, could it be that he has this left tucked up his sleeve for an Autumn budget??
Tony Wing DipSurv MIRCS FNAEA
Residential Sales Director.