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Stamp duty holiday extended and 5% mortgage guarantee scheme introduced
The chancellor has extended the stamp duty holiday and introduced a new scheme that will see the government guarantee mortgages for homebuyers who can raise deposits of 5% as part of his Budget announcement today.
Addressing the House of Commons, chancellor Rishi Sunak said he was extending the stamp duty holiday, which was introduced last year in response to the COVID-19 crisis, as the “sheer volume of transactions” meant many new purchases would not complete in time for the end of March deadline.
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He said that the £500,000 nil rate band will now end on 30 June, when a £250,000 nil rate band will be introduced, and will last until the end of September.
The chancellor also announced a new policy that will see the government guarantee mortgages for those who can afford only a 5% deposit.
He said that a number of large lenders – including Lloyds, NatWest, Santander, Barclays and HSBC – will be offering these 95% mortgages from next month, with others including Virgin Money to follow.
“As the prime minister has said, we want to turn ‘generation rent’ into ‘generation buy’,” Mr Sunak added.
The Office for Budget Responsibility said the new mortgage guarantee scheme “has not been sufficiently specified” to be incorporated in its forecast, however it said there is some evidence that a similar scheme in 2013 “modestly raised transactions”.
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