The Chancellors Housing Budget
The Chancellor's budget is always a greatly anticpated announcement for businesses in the property and construction industry and in 2021, that anticipation was greater than ever. The Coronavirus pandemic has seen much of the country's industry come to a complete standstill and while that's not been exactly the case for the home building sector, things have certainly slowed down as people's finances have come under threat. That's why, this year, the budget was more important than ever, to understand how the government was going to help people's finances and kick start the economy and in particular the housing market.
Here are the key takeaway's from the Chancellor's budget that you need to know, if you're looking for a new home in 2021:
- The stamp duty holiday has been extended for a further 3 months
- A government scheme to provide guarantees to mortgage lenders will be launched in April
- A government task force will also be created to encourage modern methods of construction (MMC)
The stamp duty land tax has been suspended on houses worth up to £500,000 since July 2020 and the budget conifmred that this tax break will now continue to the end of June. After that, the nil rate stamp duty band will be set at £250,000, double it's pre-pandemic level, until the end of September.
On top of this, the new mortgage guarantee scheme set to launch in April is designed to give lenders the confidence to offer 95% mortgages to people with just a 5% deposit, in order to get house sales moving again. This scheme will be available for new mortages up until the 31st December 2022 and all buyers will have the option to fix their initial mortgage rate for at least five years.
While these first two announcements are a welcome set of changes to the industry and will certainly help with the buying of homes, they do little to actually support home builders in the delivery of new homes. A problem that has been compounded throughout the pandemic.
The Government's proposed taskforce on modern methods of construction does at least aim to encourage quicker adoption of modular and other constructuion methods as one route to speed up house building and reduce costs which is certainly a step in the right direction, although some in the industry still feel more could and should be done here.
All in all though, we think these changes are a positive set of changes to help making buying and owning a home even easier.