The Chancellor has today confirmed that the stamp duty holiday will be extended until the end of September ..
Chancellor Rishi Sunak has announced today in his budget hat the stamp duty holiday will be extended for a further three months in its current format It will then be tapered until September. This means that people in England and Northern Ireland will not have to pay stamp duty on the first £500,000 of property if they complete – in other words, legally transfer ownership – before June 30, then to avoid a ‘cliff edge’ at the end of this period, stamp duty will not be charged on the first £250,000 of a property purchase between 1 July and 30 September.
The chancellor had been under growing pressure to extend the deadline amid concerns it was creating a cliff-edge and risked thousands of buyers pulling out of transactions if they missed the now previous deadline of 31 March for the tax break. The extension of the holiday means nine out of 10 people buying a property will not have to pay stamp duty, saving them an average of £4,500 each and a maximum of £15,000 for those purchasing a home costing £500,000.
Commenting on the extension to the stamp duty holiday and introduction of a government-backed 5% mortgage in today’s Budget, Tom Brown, Managing Director of Real Estate at Ingenious, said: “The Chancellor’s decision to extend the Stamp Duty Land Tax (SDLT) holiday and provide a Government-backed guarantee to mortgages with deposits of just five per cent reflect the importance of maintaining optimism in the UK housing market. This level of support shows that the Government continues to view the housing market as key to the UK economy at a time when the latest Nationwide House Price report confirmed that demand from buyers is being sustained. The support provided by the SDLT relief extension, saving up to £15,000 on property purchases of £600,000 is positive news for our strategy as an alternative lender focused on the affordable end of the market.
In addition, the chancellor also announced that first-time buyers will now have access to get a “government guarantee” on 95% mortgages on properties up to £600,000 with a deposit of 5% ensuring younger buyers can get onto the housing ladder.
Peter Hardy, Partner at Addleshaw Goddard, said:
“95% mortgages are back, as we all knew would be the case, and it seems the chancellor already has some banks on board. The government does seem to putting a lot of effort into turning generation rent into generation buy, which will likely cause worry across the many institutions pouring money into high quality build to rent housing which the government does not seem to support. It would be a good idea for the government to also set out a plan to support people who, even with these reforms, still won’t be able to buy — or indeed may not want to.
“Many questions are still outstanding on how the 95% mortgage will work? Will it be exactly the same as before? It’s not clear. We need to know how the government will guarantee them, how long they will last and whether they’ll be limited to first-time buyers.”