Spring budget – good news for housing sector
The government has this week announced what many in the industry are terming ‘the double bubble’.
Rishi Sunak’s budget announcement delivered on two rumoured stimulation policies for the housing markets:
· an extension to his zero-rate stamp duty holiday
· the launch of a new Help to Buy style mortgage deposit scheme for first-time-buyers.
Stamp duty holiday extension
The stamp duty extension news will hopefully come as a relief to buyers and sellers who have been desperately trying to get their sale completed in time to meet the previous deadline of 31 March.
As expected, the stamp duty holiday for homes under £500,000 in England and Northern Ireland has been extended to the end of June, and applied to sales of up to £250,000 until the end of September.
The pre-Covid stamp duty threshold of £125,000 will therefore not be reintroduced until 1 October, 2021.
Sunak has also announced in his budget that the proposed mortgage guarantee scheme for those able to save up a 5% deposit, which is almost identical to the previous Help to Buy mortgage equity scheme, will start on April 1st. (No it’s not an April Fool – it’s real!)
To offset this, the Chancellor had some bad news in the budget for estate agency and millions of other UK business owners…
Corporation tax is to rise from 18% to a whopping 25% from 2023 onwards, although smaller businesses with profits of less than £50,000 a year will see no rise. Between £50,000 and £250,000 the rate will be tapered up from 19% to 25%.
Russell Griffin, Co-Director of Samuel Wood and Midlands Regional Executive on the Propertymark Board, said: “The current business rates holiday has provided companies, many of whom have been forced to close or suffered a significant impact on their income, with the means to fight for their survival.
“But landlords who have empty properties or who have lost tenants during the pandemic have not received the same level of financial support from the government. We have been fighting for these business owners by helping to lobby Government.”
Andrew Cadwallader, Samuel Wood Co-Director, said: “As always, the Chancellor’s budget announcement is a mixed bag. The stamp duty holiday extension and the help to buy scheme are of course good news for the property market.
“The phased extension will avert the ‘cliff edge’ with a huge log jam in the chain building up having the chance to taper and allow our clients and their solicitors to transact. And we always approve of first-time buyers getting a helping hand to market.
"We are well aware that the effects of the last year have caused property prices to rocket. We still can’t predict whether they will fall, but anything which helps buyers get onto the ladder for the first time is well needed."