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Mortgage borrowing at an all-time high

LATEST NEWS | 07.05.2021

Largely due to stamp duty holidays and low mortgage rates, the recent boom in mortgage borrowing has taken net mortgage lending to £11.3bn in March, the highest of any month since records began in 1993.

The stamp duty rush

During the March Budget, Rishi Sunak decided to extend the stamp duty holiday until June, giving more homeowners the opportunity to move in time to beat the tax relief deadline or remortgaging to improve their current property. The tax break raises the minimum threshold at which stamp duty is charged from £125,000 to £500,000, bringing a saving of up to 12% on the UK’s most expensive properties.  Research by Zoopla at the end of April showed demand for UK property is up 27.5% year to date in 2021 when compared with average levels in 2020.

When has the stamp duty holiday been extended to?

The stamp duty holiday has been extended to June 30th 2021, meaning no tax will be imposed on the first £500,000 of property purchases in England and Northern Ireland. From June 30th to September 30th, tapering will mean no stamp duty will be charged on a property bought for up to £250,000. This is set to save buyers as much as £15,000 if they are buying a property of £500,000 or more. If you’re purchasing an additional property, you’ll still have to pay an extra 3% in Stamp Duty on top of the revised rates.

95% mortgage guarantee scheme 

Mortgage borrowing is also at an all-time high because first-time buyers have been taking advantage of the reintroduction of low-deposit mortgages. Introduced in April, the 95% mortgage guarantee scheme is available to anyone purchasing homes under £600,000, unless they are buy-to-let or second homes. The Bank of England said deposits into accounts “remained strong in March”, with data showing some £16.2bn more was deposited than withdrawn. 

How much can I borrow? Mortgage borrowing calculator

Whether you’re looking to remortgage for home improvements or are considering a 95% mortgage, our mortgage calculator will give you a good idea of how much a bank would be prepared to lend you.  Once you’ve calculated this, please don’t hesitate to get in touch. As mortgage brokers in Manchester, Taylormade can help you through every step of the mortgage application process, sourcing the best mortgage deals on the market and explaining everything in clear terms. You can contact our experts here or on 0345 305 2540. 
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