While the extension of the stamp duty holiday was the headline issue for property matters in the March 2021 Budget, it wasn’t the only measure announced. One of the biggest problems for property buyers is saving for a deposit.
The small deposit mortgage guarantee is great news for buyers who have been struggling, and hopefully, many prospective buyers will find assistance here. Also, existing homeowners who have found their attempts to move thwarted by the required budget will benefit too.
Will small deposit mortgage guarantee change this process for first-time buyers?
If you are interested in the small mortgage guarantee scheme, you should check if you can buy a property under the scheme. There is a threshold of £600,000; and to be eligible for the scheme, the property you buy must be priced no higher than this level.
As of the end of March 2021, Rightmove says the following about the Petersfield housing market:
“Properties in Petersfield had an overall average price of £428,729 over the last year.
The majority of sales in Petersfield during the last year were terraced properties, selling for an average price of £353,247. Detached properties sold for an average of £622,206, with flats fetching £225,461.
Overall, sold prices in Petersfield over the last year were 4% down on the previous year and 2% down on the 2018 peak of £436,809.”
Andrew Harvey, chief economist at Nationwide, said: “We have seen a significant widening in the gap between the least affordable and most affordable regions. London has been the least affordable region for most of the past 40 years – the house price to earnings ratio in the capital reached a record high in 2016 of 10.2 and remained elevated at 9.2 at the end of 2020. Scotland currently has the lowest house price to earnings ratio at 3.2, closely followed by the North at 3.3. Looking over the longer term, Northern England and Scotland have historically seen lower house price to earnings ratios than Southern England, Wales and Northern Ireland.”
There is support for property buyers
Andrew Asaam, mortgages director at Halifax, said: “We know that lockdown restrictions have made it more practically challenging for those buying and selling, but the stamp duty holiday has helped drive record levels of mortgage approvals as those held back by lockdown race to make savings. Raising a deposit is still the biggest struggle for those looking to take their first step on to the property ladder. We know that first-time buyers will benefit from steps that make a deposit more attainable and we’re committed to lending £10 billion to help people buy their first home this year.”
Zoopla’s head of research, Gráinne Gilmor spoke about first-time buyers returning to the market. Gráinne said; “Our data suggests that first-time buyers are returning to the housing market. The level of interest from people looking to step onto the housing ladder was up 5% in the first six weeks of this year compared with the last three months of 2020. We’ve also seen a 18% increase in the number of sales agreed on homes worth between £100,000 and £250,000, a price band typically associated with first-time buyers, in the first seven weeks of this year.”
At Williams of Petersfield, we aim to support the Petersfield community as much as we can, and we know this is an extremely trying time. A lot of people are looking for support and guidance, and if you have any property or housing related questions, we are more than happy to assist you, so contact us today.