03 March 2021
Budget 2021: Property summary
One of the most critical updates in the property industry is the news that the Stamp Duty Land Tax (‘SDLT’) holiday which temporarily increased the SDLT nil-rate band threshold to £500,000 has been extended for three months beyond the originally intended deadline of 31 March 2021 to 30 June 2021. This means that buyers now have an additional window in which they can make a saving. After the new deadline of 30 June 2021, the threshold will reduce from £500,000 to £250,000 until 30 September 2021. From 1 October 2021, the SDLT holiday ends with the standard pre-July 2020 threshold of £125,000 reimposed. Buyers of second homes will still have to pay the 3% surcharge and the introduction of a 2% surcharge on purchases made by non-UK residents will go ahead as planned from 1 April 2021.
The government announced a new mortgage guarantee scheme to help encourage lending to prospective buyers who cannot meet large deposit demands. It enables lenders providing mortgages to home buyers who can only afford a 5 per cent deposit to benefit from a government guarantee on these mortgages. The scheme will apply for mortgages of up to £600,000. Lloyds, NatWest, Santander, Barclays and HSBC are amongst the lenders who will offer these 95 per cent mortgages from next month and Virgin money have also pledged that their agreement is to follow. This is especially useful for first time buyers seeking to become homeowners or those put off purchasing property due to high deposit demands.
It was also confirmed that the 100 per cent business rates holiday in England in retail, hospitality and leisure sectors will continue through to 30 June 2021. For the following six months of 2021 to the end of the year, business rates will be discounted to two thirds of the normal charge. This will be up to a maximum value of £2m for closed businesses and there will be a lower cap for businesses staying open with the government stating that further detail on this is to follow.