After waiting and waiting for the reveal of the Government’s plan for how to get the UK’s economy back on its feet, March 3rd finally came around and it was time for the UK’s Budget.
During the highly anticipated Budget, Chancellor Rishi Sunak provided new, never-heard-before information on how they are going to help the UK’s economy. There were lots of interesting things to pull from the briefing, however, we going to primarily focus on how the mortgage market will be affected.
In summary, the briefing brought nothing but hope and prosperity. The only way is up from here on out!
95% mortgages are returning!
90% mortgages sneaked back into the limelight in late 2020, bringing more mortgage applicants back into the market. At this point in time, 90% mortgages were a big thing as before they came about, the market was filled with mortgages as high as 80%! Now that the time has come for 95% mortgages to come back, we are really hoping that lenders and applicants confidence will too.
The Budget showed us that 95% mortgages would become available very soon. The Government announced their comeback through a scheme called “mortgage guarantee”. The scheme sounds amazing, however, don’t let it mislead you as it’s never as easy as having a guaranteed mortgage. Your credit file and your financial suitability for a mortgage will still be assessed during your scheme application.
Lenders will never lend to you if you are going to struggle to afford your mortgage payments, they don’t want to risk accepting you only for your home to be repossessed. Of course, this is the last resort scenario; with the right Mortgage Advisor in Sheffield, you will receive help and guidance throughout the application process.
The scheme is going to be available for both First Time Buyers and Home Movers and it can also be applied to any property, not just new builds.
The mortgage guarantee scheme will be accessible from April 2021 and it will run through to December 2022. Sunak also stated that many credible lenders are supporting and behind the scheme.
As a Mortgage Broker in Sheffield, we are delighted to hear this news and are excited to see what’s in store for the market over the next month.
Stamp duty holiday extension
There is more great news… stamp duty holiday is being extended. It’s been extended to 31st June 2021.
When the stamp duty holiday was brought in last year, we all hoped that it would drive more people to carry out their property purchases and continue as normal. This wasn’t the case for everyone, people started to put off purchases, even despite the stamp duty holiday in place. The stamp duty holiday did make some people make that move with their purchase and in no doubt will this new extension too.
Solicitors are finding it difficult to keep up with the workload and if lots of property chains had collapsed, then it would have defeated the object of trying to push people to carry out their home purchase.
The stamp duty holiday extension is going to make purchases up to £500,000 tax-free until 30th June 2021 and those up to £250,000 tax-free until September 30th 2021.
Current stamp duty rates
- Property Value < £500,000 – no stamp duty cost
- Property Value £500,001 – £925,000 – 5% stamp duty cost
- Property Value £925,001 – £1,500,000 – 10% stamp duty cost
- Property Value > £1,500,000 – 12% stamp duty cost
Mortgage market update
As a Mortgage Broker in Sheffield, seeing the mortgage market catching up to speed really does put a smile on our faces. We have been waiting for 95% mortgages to come back for quite some time now and now couldn’t be a better time for them to do so. Things aren’t fully back to normal, everyone knows that, however, we are getting there. Everyone is in the same boat at the end of the day. The Government clearly sees that the property sector can play a big part in our economic recovery.
The government definitely wants to transition people’s mindset away from renting to buying by introducing this scheme. The new “mortgage guarantee” scheme should give the economy the boost that it needs, at least that’s what your Mortgage Broker in Sheffield thinks!
Also, you should know that we still have our doors open and you can give us a call or send us a message whenever you want to. We are available to answer all of your mortgage questions and any queries that you might have regarding the market and its changes anytime 7 days a week. Get in touch for a free mortgage consultation today.
Date Last Edited: September 15, 2023
