Rishi Sunak’s Spring Budget announcement earlier this month saw property professionals, landlords, homeowners and buyers all poised, ready to find out the financial provisions which would be put into place to support them as the country eases into a new, post-pandemic normal. 

The Chancellor outlined several financial provisions which are to be implemented in the coming months, most of which will start from April in time for the first easing of national restrictions. Several of these pertain directly to the property sector, which has experienced a tumultuous year since the start of the Covid-19 pandemic last March.  

Extension of the stamp duty holiday 

The temporary tax break known as the ‘stamp duty holiday’ has been extended by three months across England and Northern Ireland. 

This relieves people who are buying property up to the value of £500,000 from paying stamp duty land tax if they make the purchase before 30th June 2021. 

After this date, the government will allow what Sunak described as a ‘smooth transition’, meaning that the nil-rate threshold will be set at £250,000 until October 1st 2021, when it will return to £125,000 (where it sat prior to the holiday being introduced during the pandemic). 

Though the extension of the stamp duty tax break was prophesied by several leaked reports in the lead up to the budget announcement on the 3rd March, the official confirmation of this came as positive news to many potential buyers and sellers who has previously felt that they may need to rush into a purchase before the cut-off date at the end of the month. 

The extension is also likely to come as a relief to people who are midway through purchasing homes. According to data from RightMove, 1 in 5 home purchases that were started after the initial stamp holiday was introduced at the end of July last year have yet to be completed. If the holiday were to be curtailed as planned at the end of this March, the tax would be imposed on people still waiting for their purchases to be finalised. 

Glen Hyman, owner and managing director of Great House Design, argues that this move is a positive one, which will ultimately help many people in Britain, as well as the sector as a whole:

“The extension of the stamp duty tax break has allowed many people at different stages of the buying and selling process to breathe a sigh of relief,” Hyman states. 

“The news is especially positive for those who are hoping to buy UK property in the next month or so, as well as people who are still finalising their deals”. 

It’s also good news for the property sector as a whole; the introduction of the tax break last Summer saw major spikes in property sales, so we can hope that its extension will keep the market booming as the country moves out of its national lockdown and tries to rebuild its economy.”

95% mortgage guarantees for first-time buyers 

In an attempt to go one step further towards supporting and rebuilding the sector, Sunak also unveiled plans for a 95% Loan to Value (LTV) mortgage scheme. 

This new scheme, which is set to launch this coming April, will allow buyers to secure a mortgage on a property up to the value of £600,000 with a 5% deposit. 

This scheme is set to open doors for many first-time buyers, who have previously needed to save or secure 10-20% of the total value of the property they wish to purchase to secure a mortgage. 

Addressing the House of Commons, the chancellors said that the 95% LTV would be backed by a Government guarantee, and that several major banks including Santander, Barclays, HSBC and Lloyds were behind it. 

This will allow many first-time buyers, particularly those on lower-incomes and with less money saved, to get their foot onto the property ladder. 

Going forward, progressing towards a place in which there is more accessibility for buying property will be vital in helping to regrow the market, and the UK economy as a whole.