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Guaranteed 95% Mortgages and Stamp Duty Holiday extended
Author: Carl Shave - Director
Updated on January 26th, 2022

In a boost for the housing market, with many buyers and sellers trapped in a ‘transaction bottleneck’, the recent Budget extended the Stamp Duty holiday, in its present form, on properties up to £500,000, saving up to £15,000, to June 30th for some. The price cap reduces to £250,000 on 1st July to the end of September when it reverts to normal rates, with properties above £125,000 eligible for the charge.

First Time Buyers, however, will benefit from the tax exemption on the first £300,000 on homes priced up to £500,000 for three months from July.

In a further measure to support first time buyers, the Budget introduced a 95% mortgage guarantee scheme on properties up to the value of £600,000, starting from April this year and ending in December 2022. The usual affordability and standard criteria will still apply and the applicant’s credit history will still be a factor.

In anticipation that the scheme will be supported by the majority of lenders, with the Government offering to provide a guarantee to cover a portion of the lenders losses in the event of repossession, rates are expected to be around 3%; low deposit loans have been in short supply in the last year, but demand is expected to reach around 3,000 applications per month. People moving house will also be eligible.

The popular Help to Buy shared equity scheme, now restricted to first timers for brand new properties, launched in 2013, becomes subject to regional price caps from April.

For guidance on the most appropriate mortgage for your personal circumstances, contact our Mortgage Centres, where trained and knowledgeable advisers are happy to help.

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