Tuesday, March 9, 2021
Every year, the UK government presents a budget that entails the current financial situation of the country. As well as the current analysis, the budget also includes financial plans for the upcoming year and new policies and regulations.
In 2021, the budget has a significant role to play. As the COVID-19 pandemic had detrimental impacts on the UK economy, the public expected the government to provide relief with the Spring 2021 budget. Standing by the public expectations, the Spring 2021 Budget certainly does come with some sighs of relief for the UK citizens.
What Does the Spring Budget Say?
In a nutshell, the Spring 2021 budget had announced significant support for workers in the private and public sectors, for business owners who had been struggling to make ends meet, and further easing the requirements of certain taxes.
As far as the housing industry is concerned, there is new support offered by the government to keep properties accessible and affordable for people. Specifically, both the stamp duty holiday extension rules as well as the mortgage guarantee scheme introduced by the government is likely to provide a lift to the housing market in the UK.
The Budget and Real Estate
As the COVID-19 pandemic hit the UK, people were struggling to keep their real estate businesses afloat. Similarly, those who had their houses on mortgage were facing difficulties paying their dues on time.
In the Spring 2021 Budget, the following changes have been introduced to legal policy:
1. Stamp Duty Holiday Extension
The stamp duty holiday was originally introduced amidst the COVID-19 pandemic in 2020 in order to support the real estate industry. Since the effects of the pandemic are beginning to wear off, the government had planned for the stamp duty holiday to end on 31st March. After this date, all sellers and buyers were required to pay their stamp duty on time.
In the Spring 2021 Budget, there has been a significant extension in the stamp duty holiday. Instead of ending on 31st March, the stamp duty holiday has now been extended for a further three months until June. This eased off the pressure from most lenders, buyers, and sellers who were concerned about their transactions not being processed in time.
To further aid the housing market, the UK government announced that they would temporarily increase the stamp duty threshold to £250,000 in order to facilitate more people by abolishing their need to pay taxes. The original stamp duty threshold of £125,000 will return beginning October 1st.
2. Mortgage Guarantee Scheme
If you currently have a home with a 5% deposit, then the new mortgage guarantee scheme by the government will allow you to gain a mortgage. This contributes towards the housing industry since it promotes the buying and selling of more property – thus increasing the flow of money in real estate. This scheme has also been designed to aid homeowners who are making such a large purchase for the first time.
In order to keep the industry running, the government has promised to provide portions of deposits for the mortgages. This is likely to keep lenders interested in real estate buying and selling.
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