In the aftermath of the 3rd March 2021 Budget, we found there to be some quite positive news surrounding the property market and found out how the British economy is going to recover from the effects of COVID-19.
Chancellor Rishi Sunak provided some important information on how he plans to revitalise the mortgage market. It’s some well-received news that people in the industry and homeowners alike are both very happy to hear. For now, a light seems to be at the end of the tunnel and it may not be too long before normality resumes.
After much concern throughout the COVID-era, 90% mortgages finally made their way back into the market in October 2020. At this point in time, it felt like it would be a while until we could access 95% LTV mortgages again.
After the recent 2021 Budget, to the surprise of some and predicted by many, we found out that 95% are finally making their return to the market after all. What’s important to note however, is that the name of the scheme is rather misleading. In truth, whilst this is hugely positive news, not everyone that applies is going to be guaranteed a mortgage.
Lenders are still going to be assessing your credit score as usual, making sure that you are going to be able to afford a mortgage alongside all of your other ongoing financial commitments. A mortgage lender never takes pride in a repossession, it’s something they would ideally avoid. They would never repossess someone’s home unless they have no choice. More positive news however, as if that happens then the new scheme would cover any shortfall.
Those in the industry have been worried about the potential for current home values to take a dive, so this measure should help calm the minds of those worrying. Of course, the chances of negative equity occurring will naturally reduce should property prices increase, thanks to these announcements.
The Chancellor announced that both First-Time Buyers in Manchester and Home Movers in Manchester will have access to the 95% Mortgages scheme. This is not just a scheme for New Builds and can in fact be used on any property.
The 95% Mortgage scheme will be available from April 2021 and will run until December 2022. According to Rishi Sunak, many credible and huge lenders are already firmly behind the scheme.
As a trusted and experienced Mortgage Broker in Manchester, we are overjoyed to hear this news and are excited to see where the market goes over the next month.
Well, 95% mortgages making their way back into the market wasn’t the only good news we discovered. The Stamp duty holiday has been extended until 31st June 2021.
Back when the original Stamp Duty Holiday was introduced in 2020, we all felt that by now, life would probably be normal and COVID would be well and truly behind us. As is evident by the world around us however, things didn’t quite work out the way that they were expected to. Solicitors are struggling to keep up with the pressures of their work and if lots of chains had in fact gone under, then it would have partly defeated the objective of trying to encourage people to go on with their own personal Moving Home journey.
To keep the property market going with signs of life, and to carry on home purchases, the Government have made a decision that it is best to extend the current Stamp Duty Holiday. Property purchases up to £500,000 will remain tax-free until 30th June 2021 and property purchases up to £250,000 will remain tax-free until September 30th 2021.
Now that the market seems to be improving and 95% mortgages are going to be coming back, we’re hoping that this is the sign that we needed that normality is on it’s way back. There will obviously still be a while before things completely head back that way, but this is a good start for the property market. The Government certainly sees the property sector as an important area that can play a very large part in the recovery of our economy.
The government seem to really want people to transition back into buying over renting, as can be seen by them introducing their new “mortgage guarantee” scheme. Seeing this news as a dedicated Mortgage Broker in Manchester brings us hope and positivity for the future.
Please remember that we are still open and here to help with all your mortgage needs. Our team of mortgage advisors in Manchester are available from 8am – 10pm, 7 days a week so feel free to Get in Touch and get your mortgage process started.