With Chancellor Rishi Sunak announcing a stamp duty holiday to rebuild the economy, we explore the impact it’ll have on those looking to take their first or next step on the property ladder.

It’s fair to say the past few months haven’t exactly been a great time to search for your next home sweet home.

However, Rishi Sunak’s announcement regarding a stamp duty holiday last week should be enough to start planning your next move and schedule in your next Ikea trip. Here’s why…

What is the stamp duty holiday?

The new stamp duty holiday measures mean that homebuyers will pay no stamp duty on property purchases of up to £500,000 until March 2021.

This ambitious proposal has been introduced to help encourage buyers to continue their plans to enter or move up the property ladder and save the economy in the process too – go you!

In normal circumstances, stamp duty is a tax you usually pay if you buy a residential property or a piece of land in England and Northern Ireland. The amount you’d pay depends on the purchase price. For example:

  • For a property worth below £125,000, you wouldn’t pay any stamp duty fees
  • For a property worth between £125,001 and £250,000, you’d pay the equivalent of 2%
  • For a property worth between £250,001 and £925,000, you’d pay the equivalent of 5%
  • For a property worth between £925,001 and £1,500,000, you’d pay the equivalent of 10%
  • For a property worth over £1,500,001, you’d pay the equivalent of 12%

But with the stamp duty holiday, you can save thousands in tax if you’re planning to buy a property under £500,000. That’s unless you’re planning on buying or building a lavish property and featuring it on MTV Cribbs or Grand Designs!

The good news is that around 81% of all properties available to buy in the UK are worth under the £500,000 threshold (Rightmove), so there’s a pretty good chance you can find the perfect property which qualifies for the exemption.

What mortgages are currently available in the UK?

While the news of the stamp duty holiday is a welcome boost for buyers, the current economic climate has meant that there are fewer mortgage products available.

More complications? Perhaps. Harder work? Not necessarily.

Sure, the vast range of options you might be used to aren’t necessarily on the table, but the quality of offers available is actually a lot better than normal circumstances.

For instance, several building societies are still lending to those with small deposits. In the Financial Times, it reported that Nationwide has responded to the release of pent-up demand by returning to the high-risk end of the mortgage market just months after pulling out. As Britain’s second-largest home-loan provider, they’re offering an unlimited number of 90% loan-to-value mortgages to first-time buyers.

There’s also good news if you’re looking to buy yourself a home away from home to rent out or use yourself, as Leeds Building Society has reintroduced its range of holiday let mortgages.

Lloyds Bank is providing possibly one of the best remortgage rates as it stands, with a 1.13% fixed rate for an initial two-year period. While Barclays Mortgage is ticking all the boxes for home-movers with a 1.09% fixed rate for an initial two-year period.

However, these rates often change every week. So, if you want to find the best deals and save yourself a lot of money through the stamp duty holiday, it’s worth speaking to the right people.

Whether you’re a first-time buyer, looking to move home or simply want to remortgage, our team at Simpson Financial Services can remove the stress and complexities involved in buying or remortgaging a property.  

To find out more, get in touch with our team today, based in Leamington Spa.