It is straightforward to start climbing the property ladder at the moment in the United Kingdom. Relaxed planning regulations, amount of available financing and relatively low rate of property price growth in the London metropolitan area — all these factors stimulated demand on the market. Not surprisingly, many buyers used the Help to Buy scheme for their first purchase.
According to the Ministry of Housing, Communities and Local Government data, more than 55.5 thousand people purchased their homes during the last 12 months. The government started to advance equity loans as early as 2013. Since then, more than £20 bn of financing has helped more than 320 thousand households to benefit from the scheme. 82% of them were first time buyers.
It has never been easier to make the first step on the property ladder than in 2020. Even now, it is easy enough to secure government help if you never had a home in the UK before. The Help to Buy scheme enables you to purchase a fresh new built house or apartment with a five per cent deposit. The government tops that up with an interest-free loan worth 20% of the property value (up to 40% in London) for five years.
Right now, the rules have a regional price cap on the value of homes, and you must never previously own a home in the UK or overseas. The regional price cap in London is the highest at £600 thousand, while in the rest of the country it varies from £186 to £437 thousand.
Earlier in 2021, the new 95% mortgage guarantee scheme launch ensured that people could buy a home with only a 5% deposit.
A new policy to stand behind homebuyers: a mortgage guarantee.
Lenders who provide mortgages to home buyers who can only afford a 5% deposit, will benefit from a government guarantee on those mortgages. #Budget2021 pic.twitter.com/kyNbzHOMdM
— Rishi Sunak (@RishiSunak) March 3, 2021
The transition period of the stamp duty ends effectively 30 September, but the new buyers will not have to pay tax on the first £300 thousand of property worth less than £0.5M from 1 October 2021.
Record property sales in the flourishing market yielded a record amount of the stamp duty collected. Buyers in England and Northern Ireland paid a total of £2.06bn in stamp duty from April till the end of June, which is 90% more than in 2020 spring and early summer.
ORACLE CAPITAL GROUP is an investment and real estate development consultancy. We specialise in residential and commercial property projects.
