For this reason, you may feel confused about identifying the best way forward. With our extensive knowledge of the overall marketplace, this is where we can help.
You may also have concerns, for example, if you’ve been furloughed, are a first-time buyer, are self-employed, or have taken a mortgage payment holiday. Whilst we can’t resolve every issue, we’re fairly adept at finding solutions.
Although, even in our shoes, it can be hard to keep up. With lenders withdrawing from certain markets, then returning; products that were available at 8am, then unavailable at 8.15am; and so on.
On the upside, the Chancellor recognised early on that the property sector can be the perfect engine to help the economy to recover.
It’s partly for this reason that the Stamp Duty reduction was introduced (see box item), which could deliver a saving of up to £15,000 until 1 April 2021, when the previous rates will be reapplied.
If you then add the pent-up demand from the lockdown period, along with a reassessment by many on how they want to live their lives, it helps to create a buoyant property marketplace.
Figures from Rightmove endorse this. Homemovers have put more property on the market, and agreed more sales than in any other month since tracking this data for the last 10 years – worth a record £37bn!
More recently, Nationwide’s house price figures set out a 3.7% UK-wide annual growth for August, and a monthly rise of 2%, equating to the highest monthly increase since February 2004.
(Sources: Rightmove, August 2020; Nationwide, September 2020 release)
What does it mean for you?
The positive developments above need to be balanced by what may be ahead. We can’t lose sight that we’re in a recession, and there will be further job losses as the furlough scheme stops in October. Plus, as the mortgage payment holiday initiative nears an end, this too may bring problems. These events are likely to have an impact on the property marketplace. Also, no-one quite knows how COVID-19 will play out.
However, it’s not as if the government and lenders aren’t aware of the issues and both are keen to deliver support.
With regard to what’s on offer from lenders, there are still some excellent mortgage deals out there. The lower the percentage of loan that you need, the greater the likelihood that there will be a wider range of products on offer, a decent rate and the possibility of being accepted for a loan.
BUT – rates are starting to creep up.*
AND – the strict rules applicable to ‘evidencing of income’ and ‘affordability’ still apply across the board.
(Source: *Moneyfacts, 7 September 2020 release)
Other positive initiatives
In addition to the colossal amount of money that the government has pumped in to help us through this crisis, there are additional initiatives that would also be of interest to existing and potential homeowners.
The government intends to make the planning process easier for those that might want to add, for example, additional space above their current home, subject to neighbour consultation. Additionally, it wants to deliver greater freedom to adapt the use of vacant buildings and land in town centres to create new residential properties.
The smaller renovation projects may be easily covered from existing savings, or even money saved from not going on an overseas holiday! For the bigger projects, then talk to us about a mortgage or remortgage to help raise the funds needed.
Finally, from the end of September, you can apply for government vouchers under the Green Homes Grant. Against certain criteria, this will provide £2 for every £1 homeowners and landlords spend to make their homes more energy efficient, up to £5,000 per household. Or, in the case of those on the lowest incomes – up to £10,000. It’s applicable in England – but similar schemes may exist elsewhere in the UK.
Applicable to a residential property purchase in England and Northern Ireland.
|Up to £500,000||0%|
|The next £425,000
(the portion from £500,001 to £925,000)
|The next £575,000
(the portion from £925,001 to £1.5m)
|The remaining amount
((the portion above £1.5m))
|This is applicable on purchases up to 31 March 2021, and thereafter it reverts to the rates in place prior to 8 July 2020.
Add a 3% surcharge to the above for those buying an ‘additional’ property.
(Source: GOV.UK, 8 July 2020)
HM Revenue & Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.
You may have to pay an early repayment charge to your existing lender if you remortgage.
Your home may be repossessed if you do not keep up repayments on your mortgage.