Encouraging signs in the Spring property market

We may not be quite out of the Covid-19 woods yet but the easing of the related lockdown rules across the UK has brought a smile to the faces of many. There is much to celebrate in the property market too – with positive sales figures reflecting the ongoing trend for strong market conditions. According to Rightmove, the current market is now the fastest-selling market it has measured since its records began.

Government led initiatives such as the stamp duty tax break, and the re-introduction of 95% mortgage products supported by the government mortgage guarantee scheme , has meant that despite challenging conditions due to the Coronavirus pandemic, buyers are still purchasing, moving and climbing the property ladder.

Stamp Duty Holiday

The scheme has been extended throughout the Spring to the end of June with a staged withdrawal to follow. From 1 July 2021 to 30 September 2021 the nil band rate will apply to properties valued at £250,000 or under. From 1 October 2021 the figure will revert to £125,000 – the pre-Covid valuation.

Following Chancellor Rishi Sunak’s Budget speech at the beginning of March which detailed the extension of the stamp duty holiday to June 30th, buyer demand spiked by 24%.

95% Guarantee Scheme

Introduced on the 19th April, the Government will guarantee all mortgage products on residential properties valued at £600,000 or under where the loan is worth 91% – 95% of the total.

This has been introduced to bolster the lower rungs of the housing market by allowing first time purchasers to enter the market without the need for prohibitive deposits. Existing mortgage owners will also be eligible for the mortgage deal enabling them to take the next step in their property journey, or for example make home improvements.

A good time to move

Henry Knight, Managing Director of mortgage brokers Springtide Capital, said the market was looking good going into spring.

“There is a real air of positivity about the marketplace as we enter the spring months. There’s no doubt that the Government’s extension of the stamp duty holiday, combined with the newly introduced 95% loan-to-value guarantee scheme, have given buyers increased confidence.

“Combined with those people who have chosen to make a lifestyle change on the back of living at home for most of the last year, and those who are looking for more space in more rural locations, we have seen increasing numbers making enquiries in the market and taking up mortgage offers.

Spring Market

 A recent Rightmove survey found that March 2021 saw the greatest excess of demand outstripping supply over the past ten years. The number of potential buyers enquiring about available properties is at a record high, and 34% higher than the same period in 2020.

In April 2021, Rightmove have reported in their house price index that prices hit a record high and that properties are selling at the fastest pace ever recorded. The number of sales agreed up by 55% on same period two years ago, reducing the stock of properties that are available to buy to the lowest proportion ever recorded with two- and three-bedroom semi-detached homes selling fastest.

Zoopla’s research and insight team reported that while the impact of coronavirus will continue to be felt for some time to come the property market remains strong. It also predicted other Government strategies are to be expected that will continue to support the housing market, a positive for buyers and sellers alike.

To discuss your mortgage requirements today contact Springtide Capital on 020 8154 7280.





Buyer demand soars as stamp duty holiday is extended – Zoopla

House Price Index | Property blog (rightmove.co.uk)

7 factors that will shape the housing market in 2021 – Zoopla

Government Launch 95% Mortgage Guarantee Scheme

A new raft of 95% loan-to-value mortgage products are being introduced to the market that are backed by the Government’s new mortgage guarantee scheme. Prospective homeowners – particularly those looking to take their first step on the home ownership ladder, will be able to access 95% loan-to-value mortgage products guaranteed by the government.

Chancellor Rishi Sunak unveiled the new 95% scheme last month (early March) in his Budget speech. It is intended to boost the property market in the aftermath of the Covid pandemic by reducing the amount of deposit needed to secure a property. It will also increase competition among lenders. By taking on the financial risk of the higher loan-to-value mortgages, the Government want to give lenders confidence to relaunch their 95% deals which were mainly scrapped last year at the onset of the global Corona pandemic.

The scheme launched on 19th April is aimed at both first-time buyers and current homeowners who wish to purchase properties valued at up to £600,000 – with just a 5% deposit. Many of the UK’s largest banks including HSBC, NatWest, Barclays, Lloyds and Santander are offering the new mortgages – guaranteed by the Government – with other lenders expected to offer their own products in the following weeks.

Chancellor Sunak said the Government intends to fully support the housing market on the back of the Covid crisis and by guaranteeing the new 5% deposit mortgages, it is hoped more people will be able to take their first step on the housing ladder and become homeowners.

Boost for homeowners

Mortgage products delivered under the new 95% scheme will:

  • Be as simple as possible for lenders to administer
  • Be introduced as rapidly as possible
  • Focus on helping borrowers
  • Ensure lending remains affordable and will not incentivise irresponsible lending

Henry Knight, Managing Director of Springtide Capital, said the move was a fabulous initiative to allow people to access mortgages who may not have been able to do so before.

“The Government’s guarantee scheme will enable lenders to offer higher loan-to-value rate mortgage products. This will allow new homeowners to access the market which is vital to ensure the British housing market remains robust – especially following on from the impact of the Covid pandemic.

“Existing homeowners who are struggling to remortgage or move due to low levels of equity in their property will be able to access more competitive offers. The scheme will generate far more movement in the marketplace which is brilliant news.”

95% loan-to-value mortgage criteria

A mortgage being offered under the scheme must meet certain criteria:

  • Only residential mortgages are applicable – not second homes or buy-to-lets
  • The mortgage must be taken out by individuals, not an incorporated company
  • The property must be in the UK and have a purchase value of £600,000 or less
  • It can only be a repayment mortgage, not interest only
  • The mortgage can have a loan-to-value ratio of between 91% and 95%
  • Any lender taking part in the Government’s scheme must offer a five year fixed rate product to give borrowers the security of making predictable repayments.

Commitment to the housing market

The new scheme has been hailed as the next step in the Government’s pledge to support homeownership. Other initiatives introduced include:

  • A temporary cut to the Stamp Duty Land Tax to encourage confidence in the property market. Properties valued at under £500,000 are exempt from stamp duty until June 30th.
  • First time buyers are eligible to access the Lifetime ISA (LISA), a long-term savings product intended to support younger people saving for their first home, or for later life.

With new mortgage products becoming available all the time, speak to one of our advisers today to discover the right option for you.

To discuss your mortgage requirements today contact Springtide Capital on 020 8154 7280.




Budget: Sunak confirms 95% LTV mortgage guarantee scheme | Financial Reporter

Rishi Sunak tries to support the housing market – FTAdviser.com


Stamp Duty Land Tax: Residential property rates – GOV.UK (www.gov.uk)