There is no denying it’s tough out there at the moment, especially amidst a second lockdown, but when it comes to the housing market it’s not all doom and gloom.
In our latest blog we take a look at what’s happening in the market and how, whether you’re a first-time buyer, an investor or just looking to move in the near future, it could affect you.
Stamp duty holiday
We recently wrote a whole blog about the SDLT holiday (https://johnshepherd.com/stamp-duty-land-tax-sdlt/), but given the impact it is having, it’s definitely worth another mention.
What’s the deal with the stamp duty holiday?
In a response to the Covid-19 pandemic, the UK government has made some quite dramatic changes to stamp duty, which means in England, there is now no stamp duty on any primary residential property worth up to £500,000.
So, if let’s say you’re buying a property for £450,000 you won’t pay any stamp duty at all. And because the threshold kicks in later (usually at £300,000) you stand to make a good saving on the amount of SDLT you pay on properties over and above £500,000.
Sound good? We think so. But if an SDLT saving is a key driver for you, you must move quickly. Make that at lightning speed because as it stands the SDLT holiday ends on 31 March 2021.
In a slight contradiction to the statement above, as a first-time buyer you might not need to move quite so fast as most first-time buyers don’t tend to pay stamp duty. That’s because the average cost of a home for a first-time buyer is less than the £300,000 threshold.
Instead, you can focus your energy and efforts on how you’re going to secure your first home, which will either be with a standard mortgage or via one of the several government schemes that are available.
Help to buy
One such scheme is the Government’s Help to buy equity loan, which is a loan for up to 20% of the cost of your new build home, so you only need a 5% cash deposit and a 75% mortgage to make up the rest. It’s worth noting here that the scheme is only available on new builds with a value of up to £600,000 and the house must be your only property.
What changes are coming in from 1 April 2021?
Whilst the scheme has been extended until 2023, from 1 April 2021, the Help to buy scheme will ONLY be available for first-time buyers.
Whilst the most obvious group to benefit from the SDLT holiday are home buyers and movers, first-time investors and landlords looking to expand their buy-to-let portfolios in the private rented sector can also expect to save thousands in tax.
So, all in all, it pays to remain upbeat about the current market even if the future may feel a little uncertain.
If you’re a first-time buyer, an investor or just looking to move in the near future we are on hand with expert financial and mortgage advice, so you should get in touch today.