Stamp duty holiday extended and lower mortgage deposits introduced

News at Randalls Residential | 03/03/2021

Homebuyers will enjoy a tax break for a further three months after Rishi Sunak extended the stamp duty holiday until June 30 in today’s Budget.

The Chancellor responded to widespread fears of a cliff-edge drop for the property market if the initial March 31 deadline was maintained.

Instead estate agents are today bracing for a spring stampede of homebuyers as there will continue to be no stamp duty payable on the first £500,000 of any home purchase for a further three months.

This saves home buyers up to £15,000.

Mr Sunak said the stamp duty holiday would be extended until the end of June followed by an increase to the nil rate band to £250,000 until September. The lower stamp duty band of £125,000 will only be reintroduced in October.

Rightmove estimates an additional 300,000 property transactions in England could get through as a result of the extension but cautioned that new buyers who weren’t already in the process of buying a home were unlikely to meet the new deadline.

“We’re likely to see a rush of new buyers also trying to make use of the savings, but it’s worth remembering that the huge logjam will mean a new sale being agreed is still likely to take over four months on average to complete,” said Rightmove’s Tim Bannister.

And on the “mortgage guarantee”, the Chancellor said: “Lenders who provide mortgages to homebuyers who can only afford a 5 per cent deposit will benefit from a government guarantee on those mortgages.

“I’m pleased to say that several of the country’s largest lenders including Lloyds, NatWest, Santander, Barclays and HSBC will be offering these 95 per cent mortgages from next month, and I know more, including Virgin Money, will follow shortly after.”

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