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Budget 2021 Mortgage Market Overview

The March 2021 Budget provided lots of positives to take in; the mortgage market was particularly blessed with great news. Chancellor Rishi Sunak introduced a new government led scheme called the “Mortgage Guarantee Scheme” and also annoced that the Stamp Duty Holiday will be extended to an even later date.

The UK’s mortgage market needed a boost like this. The government clealry see the mortgage market playing a vital part in the plan to get the UK’s economy back on track.

95% Mortgages Returning & Stamp Duty Holiday Extended | Budget 2021

95% mortgages are coming back!

During late last year in October 2020, 90% mortgages made their way back into the forefront of the mortgage market, but there were still no signs of 95% mortgages returning. It looked like there was no end in sight, not until the recent Budget anyway…

In the recent 2021 Budget, we saw that 95% mortgages were going to be coming back sooner than we expected. Sunak announced a new way for First Time Buyers and Home Movers to get themselves up the property ladder, this was introduced as the “Mortgage Guarantee Scheme”. This name, however, is a bit misleading as you are never guaranteed a mortgage. Lenders will take lots of different things into account before accepting your mortgage application, they ill assess your credit score, make sure that you’ll be able to meet your monthly payments and various other things. Lenders won’t lend to someone who carries a risk of their home being repossessed, although repossession is the last resort, lenders will never risk it just in case.

Lenders have recently been worried about the idea of home values decreasing, so this new scheme should alleviate that concern although of course, the chances of negative equity occurring will naturally reduce should property prices increase as a result of these announcements.

Sunak included that both First Time Buyers and Home Movers will be able to take advantage of this scheme. It can also be used on any property too, not just new builds.

This new scheme will be available from April 2021 and will run until December 2022. We also learnt that many credible lenders are already backing the scheme.

As a Mortgage Broker in Cardiff, this news comes to us with nothing but positivity. We can only go upwards from here!

Stamp duty holiday extension

In the Budget, we also learnt that the stamp duty holiday has been extended until 30th June 2021.

When the stamp duty holiday was extended last year, we were all in the mindset of “it’s just a phase”, but we quickly learnt that things were going to take a while to change back to how they were. When the stamp duty holiday was introduced, people gained a bit more confidence in the market and it made people continue through with their purchases. We are hoping that this further extension, makes people do the same and continue with their purchase, even despite the current circumstances. The stamp duty holiday and the 95% mortgage scheme go hand in hand, we are hoping for the confidence amongst homebuyers in the UK to come back.

The stamp duty holiday has been extended, which means that property purchases up to £500,000 will remain tax-free until 30th June 2021 and those up to £250,000 will stay tax-free until September 30th 2021.

Current stamp duty rates

  • Property value < £500,000 – no stamp duty costs
  • Property value £500,001 – £925,000 – 5% of the property purchase price
  • Property value £925,001 – £1,500,000 – 10% of the property purchase price
  • Property value > £1,500,000 – 12% of the property purchase price

If this news is music to your ears and you are thinking that it’s time to look at Moving Home in Cardiff, it may also be time to start weighing up your mortgage options. You can always evaluate your mortgage options by approaching a Mortgage Broker in Cardiff, they will talk you through the entire process step-by-step. We are just one call away and would love to help you with this.

Mortgage market update

Now that the mortgage market is looking more and more positive each week, it may be time to start getting mortgage ready. With 95% mortgages on the horizon, you may be able to bag yourself a great mortgage offer within weeks of your initial enquiry. Now that the stamp duty holiday has also been extended, you should hopefully expect to pay fewer fees upon your completion.

Furthermore, lenders are still dealing with a lot of applications and have quite a backlog of mortgage applications to process and mortgage appointments to book. So if your nat to take advantage of the new 95% mortgage scheme and the stamp duty holiday extension, you should contact our Mortgage Broker in Cardiff and we will put you straight through to a Mortgage Advisor. Our responsive team will always be available for a chat from 8am-10pm, 7 days a week.

This will be very useful to you if you are a First Time Buyer in Cardiff, we can help you compare deals and check whether you match the scheme or not. For your free mortgage consultation, get in touch with our expert Mortgage Broker in Cardiff today. We can’t wait to try and help you!

Cardiffmoneyman.com & Cardiffmoneyman are trading styles of UK Moneyman Limited, which is authorised and regulated by the Financial Conduct Authority.
UK Moneyman Limited is authorised and regulated by the Financial Conduct Authority.
UK Moneyman Limited registered in England, registered number 6789312 and registered office 10 Consort Court, Hull, HU9 1PU.

© 2021 Cardiffmoneyman

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