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Stamp duty extension coming

28 Feb 2021
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Stamp duty extension coming

This week in five seconds

  • Good time to list as stock is down 28% last six months
  • Expected statements in the Budget next week:
  1. Stamp duty extension
  2. 95% mortgages for first time buyers
  3. Furlough scheme extension
  • Listings rising
  • Buyer uncertainty will be over next week
  • Expect a high demand on lenders so buyers get in there early

Good time to list, stock low

We note that stock levels on the market are down 14% since the start of the year and down 27% since their peak in October 2020, meaning that buyers have less to choose from. We expect that with the increased visibility of lockdown ending the market will open back up and those sellers well prepared and on the market will benefit from the resurgence of activity, with limited stock available for buyers.

 

Expected statements in the the Budget

There have been a number of news articles leaking the government's intentions in the Budget on Wednesday March 3rd, next week:

  • Extension to Stamp Duty holiday - Stamp duty holiday to be extended to end of June as reported by The Times.  What isn't clear is whether the extension is three months for all current and new buyers of properties up to £500,000 - thus creating a new cliff edge - or a 'tapered' extension only for current buyers. (EA Today).
  • Boost for first time buyers - The chancellor plans to incentivise lenders to provide mortgages to first-time buyers with just 5% deposits. The Treasury will guarantee part of the loan to encourage banks to offer riskier mortgages on properties worth up to £600,000.  Boris Johnson said he wants “generation rent” to become “generation buy”. Treasury officials are hopeful that the new scheme, which is a successor to the Help to Buy mortgage scheme introduced by David Cameron and George Osborne in 2013, will provide a major boost to the housing market. (The Times)
  • Extension to furlough scheme - The Times also says the Budget next week will see the extension of the furlough scheme for up to another three months - it was due to end on April 30.

Listings picking up

We are already seeing an increase in sellers looking to list their properties.

Buyer uncertainty will be over next week

The buyers we referred to last week, who were holding off committing to a property purchase until announcements were made, are likely to be motivated towards the end of this week, post the Budget, when they will no longer be facing the uncertainty and will be competing with other buyers in a similar position. 

 

Agree financing now, before the rush

If you are looking to purchase a property, think about speaking to a broker and agreeing your finance in principle. If there is a large increase in buyers there may be competition to agree lending and we may start to see the time for lenders to come back with agreements in principle get longer, as the workload increases.

 

Have a great week.

 The Movewise Team

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