As a result of the 3rd March 2021 Budget, we now know the Government’s plan to try and kickstart the UK’s economy. COVID-19 hit us quite hard, however, it now looks like things could be on their way to improve after the announcement during the latest Budget.
Regarding the mortgage market, Chancellor Rishi Sunak provided us with some great information on how he’s going to get the market back up and onto its feet. This is the news that we’ve been waiting for; it’s what we need to get us rolling again!
During the backend of last year, when 90% mortgages made their back onto the market, there was still uncertainty amongst applicants and lenders and there seemed to be no sign of 95% mortgages coming back. This was until the briefing were Sunak announced that they would make a return through a new scheme.
This new scheme is called the “mortgage guarantee scheme”. Don’t let it’s title mislead you though as it doesn’t guaranteed you a mortgage in every scenario. You will still need to match lenders criteria and pass their credit scoring systems to qualify for the scheme. Lenders will not lend to someone who cannot afford mortgage payments and carries the risk of getting their home being repossessed. Of course, this is the last resort, however, you must be aware that not everyone will qualify for the scheme.
Sunak stated that this new scheme will apply to both First Time Buyers and Home Movers. The scheme can also be used on any type of property, not just new builds.
The scheme will be start from April 2021 and will carry on until December 2022. The Chancellor says that many credible and huge lenders are backing the scheme.
As a Mortgage Broker in Birmingham, we are excietd about this news and cannot wait to see what the market has to offer within the coming months.
As well as 95% mortgages making their back to the forefront of the market, we have been given excellent news that the stamp duty holiday has been extended up to the 31st June 2021.
When the stamp duty was introduced last year, we thought that purchases would carry on as normal and people would see this government gesture as their way of saying the market is running smoothly. However, some people still eased off purchasing despite the great opportunity to do so. Now that the stamp duty holiday has been extended and along with a combination of 95% mortgages, we are expecting that more lenders and applicants will invest in the market.
At the moment, we are seeing that some solicitors are struggling to keep up with the workload. If lots of chains had collapsed then it would have partially defeated the objective of trying to push people to carry on progressing their Moving Home journey.
To keep the confidence contained in the market, the government have chosen to extend the stamp duty holiday so that property purchases up to £500,000 will remain tax-free until 30th June 2021. And properties up to £250,000 will remain tax-free until September 30th 2021.
Now that the future is looking brighter and more and more people are returning to the mortgage market, we are hoping that things are on their way to somewhat “normal”. Nothing will ever be “normal” but hopefully, things will get better.
We saw March’s Budget as a sign that the government is completely backing the sector and has big plans to get it back up and running as soon as it can. We know that the government want to turn everyone’s mindset to buying over renting, they may think that the new scheme will do this.
Your Mortgage Broker in Birmingham is still open as usual. Our hardworking team are available 7 days a week so don’t hesitate to get in touch with our friendly advisors. Whether it’s something to do with the market or a different mortgage question, our advisors will always be happy to help you!