Property Market Boost To Buyers
While the stamp duty holiday extension offers a short-term boost to the housing market, and relief for current buyers, it is the mortgage guarantee that will hopefully sustain interest and activity in the housing market.
This measure has grabbed attention for the support on offer to first-time buyers, but it is available for existing homeowners too. The guarantee incentivises mortgage lenders to offer products to buyers who provide a 5% deposit, on home purchases up to £600,000.
This is positive news, and it should lead to more property transactions.
Saving for a deposit is one of the biggest challenges homebuyers face, and it has been a barrier to homeownership. This scheme should provide buyers with confidence, as well as offering lenders dependable support, which will help them support more buyers.
Industry backing for this measure
Iain McKenzie, CEO of The Guild of Property Professionals, commented: “The Chancellor gave the property market a double shot in the arm today, with a boost from the stamp duty holiday extension and 95% mortgages. Extending the stamp duty holiday until the end of June, then phasing it out until September should help avoid a sudden downturn in prices caused by the much-feared cliff-edge end. With the zero-rated stamp duty limit extended to £250k until the end of September and the average UK house price being £252k, it means that thousands of people can benefit from this incentive – particularly first and second-time buyers. The Government is really looking to turn Generation Rent into Generation Buy.”
Tomer Aboody, director of property lender MT Finance, said: “The stamp duty holiday extension is welcome and will ease the logjam many are facing. The gradual tapering of the return to the £125,000 nil rate band by 1 October should also help avoid the cliff edge that many feared we would have with a sudden cut-off point. “With further assistance towards those with a small deposit by backing 95% mortgages, the government will indeed help turn Generation Rent into Generation Buy, encouraging would-be purchasers to get on the ladder. The chancellor recognises the importance of the housing market to the wider economy and is doing all he can to support it.”
The economy has been tipped to respond well
Sunak says the says the Office of Budget Responsibility are now forecasting a “swifter and more sustained recovery than expected”.
The Chancellor also announced the Office of Budget Responsibility (OBR) are forecasting a “swifter and more sustained recovery than expected”. The economy will hopefully return to pre-Covid levels by the middle of 2022. However, Rishi Sunak warned the economy is likely to be 3% smaller in five years, than it would have been.
He said; “The OBR forecast that our economy will grow this year by 4%, by 7.3% in 2022, then 1.7%, 1.6% and 1.7% in the last three years of the forecast.”
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