Chancellor Rishi Sunak has today (8 July) announced the Government’s latest economic response to coronavirus in his Summer Economic Update. This includes some BIG news for new mortgage borrowers and home owners.
We’ve seen a strong rebound in housing activity since the market reopened. Market confidence is slowly returning as buyers and sellers get on with deals that have been put on hold firstly because of Brexit, then while they waited for the general election outcome, and finally because of the coronavirus pandemic.
Borrowers have been well supported by the government with its mortgage payment holiday programme and support for households and jobs on a scale never before seen. Today’s announcement of a stamp duty holiday will provide a further boost to demand for housing and borrowing as follows:
Residential Stamp Duty Holiday (SDLT)
From today, the government is introducing a temporary increase to the Nil Rate Band of Residential SDLT (Stamp Duty) from £125,000 to £500,000 until 31 March 20201. This is aiming to encourage more people to buy – giving the property market a much needed boost.
Stamp duty is a tax paid by people buying properties. How much you pay depends on whether you’re a first time buyer, the location and the price of the property you are buying. First time buyers are already exempt from stamp duty up to £300,000, and pay discounted rates up to £500,000. For everyone else, the levy only applies after £125,000. Once you reach this threshold, you typically pay 2% of the value between £125,001 and £250,000, and 5% between £250,001 and £925,000.
In England and NI, almost 9 out of 10 people on the property ladder will now pay no Stamp Duty at all until the end of March 2021.
We await more details on the revised bandings that will be published on the government website: https://www.gov.uk/stamp-duty-land-tax/residential-property-rates.
Green Homes Grant Scheme – Homeowners & Landlords
From September, a new scheme is being launched to help to pay for green home improvements to make a property more energy efficient. Vouchers of up to £5,000 per household will be available, and up to £10,000 for the poorest households, to pay for improvements such as loft, wall and floor insulation.
Under the Green Homes Grant, the government will pay at least two-thirds of the cost of home improvements that save energy. For example, if a homeowner installed cavity wall and floor insulation for £4,000, the homeowner would pay £1,320 and the government would contribute £2,680.
The scheme will launch in September, with online applications for recommended energy efficiency measures, and details of accredited local suppliers. Once one of these suppliers has provided a quote and the work is approved, the voucher will be issued.
We welcome these measures that have been introduced to help people to feel confident to move, to buy, to sell, to renovate and to improve their homes. Our expert mortgage advisers provide straight-talking mortgage advice – whether you’re a first-time buyer, remortgaging, buying to let, or simply buying a new home. We’re proud to have won both local and national awards for advice and service.
Your home may be repossessed if you do not keep up repayments on your mortgage.