Last week Rishi Sunak announced his budget 2021 including some incentives to help support the residential property market. So what will this mean for the property industry this year?
1. Customers Can Invest with Smaller Deposits
The new mortgage guarantee scheme announced as part of Budget 2021 means that until December 2022, those looking to buy a home will be able to purchase with just a 5% deposit, with the government guaranteeing banks protection on the difference between 5% and 20% of the property value. Find out how it works.
This means that estate agents and developers can market to a wider demographic as well as using messaging that shows purchase samples with between 5% and 9% deposit which has now become a realistic offer. This provides opportunities to new first time buyers to get on the property ladder with limited equity while also opening the market to those looking to move up the property ladder who have insufficient equity in their existing property to move to this next step.
2. Banks will have the confidence to lend
The newly announced mortgage guarantee scheme will mean that banks can have the confidence to lend to buyers even if they do not have a large deposit. This means that customers are much more likely to be able to secure mortgage finance for their purchase.
3. Buyers can Purchase Stamp Duty Free
Those looking to buy a home will still qualify for the stamp duty holiday that was in place during 2020. In Budget 2021, the stamp duty holiday has now been extended to June 2021 and means that no stamp duty is payable on properties up to £500,000 with SDLT payable on any amount above this threshold.
This provides a twofold benefit to property sellers. Firstly it offers buyers a significant saving in buying a home allowing them to either spend more on their new home or to save more for the future. Secondly it creates a sense of urgency among home buyers to commit to a purchase in order that they can complete in time.
4. Second Chance SDLT Offer
For those who miss out on the original stamp duty holiday offer, a further stamp duty holiday will apply between June and September 2021 on homes up to £250,000 instead of the current £500,000. After this it will revert to the usual £125,000. This provides an extended opportunity to promote a cost saving for those investing and able to complete during this period.
Get Help Updating your Messaging
We can help you update your messaging and marketing to best leverage the opportunities that the latest budget has provided for property businesses. Why not get in touch to discuss your marketing needs?
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