The biggest property take-homes from the Budget 2021

The big one – the Stamp Duty holiday has been extended.

The campaign calling for an extension to the Stamp Duty holiday, to swerve the risk of a damaging cliff-edge scenario at the end of March, had gained significant momentum in the lead-up to the Budget.

MPs from all parties, conveyancers, estate agents, trade bodies, leading economists and members of the public had exerted considerable pressure on the Chancellor. A petition, which received more than 150,000 signatures and a parliamentary debate in which a whole host of cross-party politicians called for an extension to the holiday on behalf of their concerned constituents.

In the days before the Budget, it became clear that the campaign had done its job, but Sunak confirmed the speculation today. He revealed that the Stamp Duty holiday will be extended from March 31 to June 30 – ‘and then, to smooth the transition back to normal, the nil rate threshold will be £250,000 until the end of September’. 

As a result, there will be a Stamp Duty holiday on properties up to £500,000 until the end of June, as is the case now, before a holiday on properties up to £250,000 until the end of September. It’s not clear if there will be tapered or cliff-edge ends to both these new dates. 

However, we are now clear that it’ll not be until October 1 that the pre-Covid stamp duty thresholds and levels will resume. Outside of the holiday, the nil rate threshold is normally £125,000.

95% mortgages – making it easier for buyers?

As well as the extension to the Stamp Duty holiday, the other biggest property announcement was the Government revealing its intention to help future property buyers with a mortgage guarantee scheme expected to be available to all buyers of properties costing up to £600,000.

The scheme, originally proposed by Prime Minister Boris Johnson last October, will see the Government provide lenders with incentives to bring back 95% mortgages which have largely disappeared during the pandemic. A number of major lenders, including Lloyds, are already on board, with more expected to follow.

The number of low-deposit products for borrowers has only recovered to a fraction of what it was before March 2020, with lenders reluctant to provide these riskier mortgages at a time of economic crisis. The same happened after the global financial crisis, when such mortgages disappeared overnight. 

Property buyers using the scheme will be able to purchase a home with a deposit of just 5%, significantly lower than the 10% or 15% currently required by many lenders.

What impact did the announcement have?

Within just five minutes of the Chancellor’s announcement, the use of Rightmove’s mortgage calculator jumped by 25% while overall traffic to Rightmove grew by 16%. The portal also revealed that nearly half (45%) of all properties will be exempt from stamp duty from July to September, as a result of the holiday.

Stephen Ludlow, Chairman at ludlowthompson says: “The Stamp Duty holiday has helped drive the consistently high levels of activity we’ve seen in the property market. The extension will further incentivise prospective buyers.

In terms of the wider economy, the average £15,000 saving on Stamp Duty goes to work several times over in assisting economic recovery generally.”

“Buyers, including buy-to-let landlords, will spend more money on improving their properties, with businesses and local tradespeople reaping the benefits.”

“The Bank of England suggest that there are £100 BN of excess savings that have been built up by UK households during Covid-19 and that money is looking for a safe haven and residential property presents just that opportunity, whether through direct purchasers, Buy-To-Let or through the Bank of ‘Mum and Dad ‘supporting their Children’s purchases.”

To understand how you can benefit from the Budget measures in your property journey, it’s important you work with an experienced, knowledgeable estate agent.

Here at ludlowthompson, our agents are continuing to offer prospective buyers guided video tours of properties. In-person viewing appointments complying with social distancing policies are also available following virtual viewings.

To find out more about our current services, and selling a home throughout London, please get in touch with one of our offices today.

For an idea of what your home could be worth currently, you can check out our free and instant online valuation.