The Latest News on Stamp Duty and Mortgages – and How it Might Affect Your Property Purchase in Sunderland

05 Mar 2021

The 2020 stamp duty holiday galvanised the UK’s property market, and many parts of the country experienced record levels of sales. Originally, Chancellor Rishi Sunak indicated the tax break would end on 31st March, 2021. However, his announcement in the latest Budget confirmed that it will be extended, which is big news for homebuyers in Sunderland.

He’s also introduced low-deposit mortgages, which will motivate more people to invest. Here’s more information about the changes.

Stamp Duty extended until June

The chancellor stated that the tax break would be extended until 30th June – three months in total. As before, this means that all house purchases under £500,000 will be exempt from stamp duty. This is fantastic news if you’re looking for property in Sunderland, as it means you’ll be able to get more home for your money, or even consider one of its ultra-desirable areas, such as Whitburn or Cleadon Village.

Additionally, the tax holiday won’t have a sharp cut-off date (as it did before). This time, there will be a staggered ‘drop-off’ after the end of June, with buyers benefitting from no stamp duty on purchases under £250,000. From October onwards, the stamp duty rates will return to normal, with only properties priced under £125,000 eligible for the tax exemption.

Industry experts have welcomed the news, with one commenting: “The three-month taper until October will make any cliff-edge in June feel less steep, but we would still expect a surge in activity to capitalise on the full saving.”

How much could you save?

This depends on the cost of the property you intend to buy. For example, if you pay £200,000 for your home, you’ll save £1,500 against the purchase. If the house costs £400,000, you’ll save £10,000, which is really appealing.

If you want to make the most of the excellent savings, it’s wise to act quickly. The majority of sales are completed within 12 to 16 weeks, but the more time you give yourself, the more likely it is that you’ll benefit from the exemption.

What about mortgages?

The Chancellor also announced the introduction of 5% deposit mortgages in the Budget. This government-backed scheme is designed to support those who are struggling to raise a large enough deposit to buy a home, and is eligible for all purchases up to £600,000.

The 95% mortgage can be used to buy any property, not just new-builds; and it gives homebuyers a lot more freedom when it comes to purchasing a home in Sunderland.

For example, to buy a £200,000 house, you’ll now only need to find £10,000 as a deposit – which feels like a much more manageable sum of money. For a £400,000 home, you’ll require a £20,000 deposit; a lot cheaper than the £40,000 you’d usually need for the standard 10%-deposit mortgage.

How to make the most of the savings

It’s likely that these changes will motivate many people to start searching for property in Sunderland. To stay ahead of the crowd (and cash in on the savings on offer), it’s a good idea to start scouring the market as early as possible. It’s a great financial opportunity, and one that shouldn’t be missed.