This might seem ambitious, after a rollercoaster 12 months, but, you know, ‘he who dares Rodney.’
There are no prizes for guessing what I came up with for March and April, but my plan was more cunning than you might imagine.
I thought this would prove a good time to address first-time buyer life beyond the stamp duty deadline. Of course, this deadline was always likely to have some fluidity, due to the sheer volume of property-related transactions over the past six months.
And so it proved. The Budget confirmed many suspicions, but the topic remains valid as we are hopefully looking at a clearer path to a mortgage world which doesn’t revolve around stamp duty.
Granted this is something of a simplistic statement. Stamp duty will remain a necessary calculation for the majority of purchases now and in the future.
However, it’s important for first-time buyers, and those looking to take a step up the property ladder, also to appreciate what other support measures have been available from April onwards.
Mortgage Guarantee Scheme
The mortgage guarantee scheme has seen the government guaranteeing 95 per cent loan-to-value (LTV) mortgages for buyers with five per cent deposits. It has been designed to increase the appetite of mortgage lenders for high LTV lending to creditworthy customers. Under the terms of the scheme, the government will guarantee the portion of the mortgage over 80 per cent.
We are proud to be part of this initiative which we hope will support a new generation in realising their homeownership aspirations.
But it’s not the only available avenue for potential borrowers.
Help to Buy
The new Help to Buy Equity Loan Scheme (2021-2023) will be launched, aimed solely at first-time buyers purchasing a new build property.
As with the previous guise of the scheme, the government will lend homebuyers up to 20 per cent of the cost of a new-build home, with borrowers required to pay a further five per cent. The loan is interest-free for five years. However, under the new scheme, Help to Buy has regional price limits set at 1.5 times the average first-time buyer price in each region of England.
The new Shared Ownership scheme allows buyers to purchase a minimum share of 10 per cent, compared to 25 per cent previously and will permit staircasing, whereby buyers increase the share they own in instalments of one per cent, compared to the current five per cent or 10 per cent.
In addition, a new 10-year period will be introduced for maintenance and repairs, whereby the landlord or housing association will be required to cover costs rather than homeowners.
Brokers are integral
It’s positive to see a range of government-backed options, even if these initiative will not suit the needs of every borrower.
Intermediaries will play an integral role in ensuring that potential borrowers are fully informed about individual schemes, and the pros and cons attached to them.
The value of the advice process will ensure there remains life after the stamp duty deadline for a growing number of first-time buyers, and will remain crucial in delivering the right solutions to meet a host of ever-changing property-related dreams.