Last Summer, the Government announced temporary changes to Stamp Duty (SDLT) in England. The changes were introduced to benefit both buyers and sellers following the first Covid-19 lockdown. Initially, the Stamp Duty holiday was meant to expire this March, however, it’s now been extended until the end of June, 2021.
As well as a stamp duty extension, the government has also brought back the 95% deposit scheme which means that first-time buyers will be able to secure a mortgage with just a 5% down payment. So, what does this mean for buyers going forward?
As first-time buyers should know, Stamp Duty is the lump-sum tax that anyone who purchases a property or land must pay over a certain threshold. Before the Covid-19 pandemic, the threshold figure was payable on purchases over £300,000.
However, the scheme which has now been extended till the end of June 2021, means that stamp duty will be wavered on residential properties worth up to £500,000, resulting in 9 out of 10 buyers being exempt from paying tax.
With June just three months away it is important to act fast. Most property sales usually take at least three months to complete but with an average saving of at least £4,500, this is not a scheme to miss.
Available from April, the return of this buyer initiative which has been introduced enables both first-time buyers and homeowners to purchase properties worth up to £600,000 with just a 5% mortgage.
Up until recently, most lenders were offering just 85% mortgages which required a 15% deposit from buyers. This scheme ensures that first-time buyers will only need to save up to a third of what they previously would have had to save to secure a mortgage.
The good news is that nothing needs to be done from the buyer’s end to take advantage of this scheme. Instead, it is being put in place to incentivise banks and building societies to offer 95% mortgages with the understanding that the government will guarantee outstanding loans if the buyer defaults.
The scheme is set to be in place up until December 2022, giving buyers plenty of time to save up their 5% deposit and secure their dream home. The two new schemes means that there has never been a more ideal time to become a homeowner in Manchester.
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