We’ve all read it. Banks pulled mortgages; interest rates are rising; the mini budget caused a not-so-mini meltdown…
So, it’s no surprise that people are wondering if it’s really as bad as we’re reading, especially if you find yourself on the cusp of wanting to buy a new home.
Is it all doom and gloom? Or is there hope, options and a way forward if you’re reading to take the next (house) move?
Well here’s some good news in the form of current government schemes:
Stamp Duty Land Tax relief
What it applies to:
All purchases of residential property
Key benefits:
Stamp Duty Land Tax relief for people buying their first home.
Key requirements:
Purchases of residential property of up to £425,000 by first time buyers.
The details:
Stamp Duty Land Tax is a tax to pay if you buy a property in England. Different rates of stamp duty are charged on the portion of a property’s value within price bands.
You get a relief from SDLT if you (and the person you are buying with if you are buying with someone else) are first-time buyers purchasing a residential property of up to £425,000 (provided the property you’re buying costs £625,000 or less).
For people who are not buying their first home, stamp duty usually only applies to purchases of residential properties over £250,000. The different rates of SDLT charged on the portion of a property’s value within each price band is shown below:
Property value: up to £250,000 (£425,000 for first time buyers) = 0% SDLT rate
Property value: £250,001 – £925,000 = 5% SDLT rate (rate applies to that portion of the purchase price)
Property value: £925,001 – £1,500,000 = 10% SDLT rate (rate applies to that portion of the purchase price)
Check out: https://www.stampdutycalculator.org.uk/ to calculate your stamp duty.
The Mortgage Guarantee Scheme
Key benefits:
For households looking to buy with a 5% deposit on properties costing a maximum of £600,000 to apply for a 95% loan to value (LTV) mortgage with participating lenders offering a government backed mortgage guarantee scheme.
Deposit required:
5% deposit
Ownership:
Full Ownership
Key requirements:
Available from participating lenders across UK on properties with a purchase price of £600,000 or less, where a borrower has a deposit of 5%. Available to first time buyers and existing homeowners who are looking to move and require a 95% Loan-To-Value mortgage.
How does it work?
The mortgage guarantee scheme offers lenders the option to purchase a guarantee on mortgages where a borrower has a deposit of only 5%.
The guarantee compensates mortgage lenders for a portion of net losses suffered in the event of repossession. The guarantee applies down to 80% of the purchase value of the guaranteed property covering 95% of these net losses. The lender therefore retains a 5% risk in the portion of losses covered by the guarantee. This ensures that the lender retains some risk in every loan they originate.
This scheme is available until 31 December 2022.
Need more information? Find out everything you need to know here: https://www.ownyourhome.gov.uk/all-schemes/
