The government guarantees mortgages up to 95% of the home price
Property industry experts reacted positively to Rishi Sunak’s budget announcement on Wednesday, outlining the need for more sustainable reforms.
The Chancellor has promised to “support homebuyers” and extended the stamp duty holiday until June. The stamp duty payment point will remain at £250,000, double the standard level, until the end of September. The budget also includes a guarantee that the government will guarantee mortgages up to 95% of the home’s value.
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Housebuilders Persimmon (5.96%), Barratt Developments (5.7%) and Taylor Wimpey (5.41%) are the top four gainers on the FTSE 100 index following Finance Minister Rishi Sunak’s Budget announcement on Wednesday afternoon. They accounted for three of the companies. Today follows a recent surge in UK housebuilders which continues to underpin the index of UK top companies.
Commenting on the budget and its impact, Hometrack Managing Director David Ross said:
“Our analysis shows that a 95% first-time buyer mortgage scheme would primarily support borrowers in lower-cost markets, particularly the north of England, all of Scotland, parts of Wales and Northern Ireland. Therefore, lenders consider what kind of mortgage loan. ‘You’ll know what you need to consider.” High house prices in the south of England make it very difficult to get a 95% mortgage, and mortgage regulations cap loans based on income levels. are limited, making this even more difficult.
Zoopla research director Richard Donnell praised the overall impact of the Sunak policy on the housing market, but said it did little to address the long-term structural problems in the housing market.
“Taken together, the stamp duty holiday extension and the 95% mortgage guarantee scheme provide continued support to the housing market as we help the economy respond to the pandemic. “It addresses barriers to access, but it will have limited impact on shifting the long-term fundamentals of the housing market,” Donnell said.
