A lot happening in the housing market at the moment.
Today, the Chancellor announced a cut in stamp duty, with the threshold before you start paying doubling from £125,000 to £250,000, which will help homebuyers.
Someone buying a £270,000 house will see their stamp duty bill fall from £3,500 to £1,000, a saving of £2,500.
First-time buyers benefit too, as the threshold for them paying stamp duty at all has gone up to £425,000 from £300,000.*
On the face of it this looks like positive news, with lower bills for homebuyers.
However, we must add the caveat that the move is aimed at stimulating an already buoyant housing market and could mean that prices will go up. That affects everyone, but especially those looking to get on the housing ladder for the first time.
On the other side of the coin, just days earlier, the Bank of England put up the base rate by 0.5%, meaning that mortgage rates will go up too. This was billed as a move to slow price increases and reduce inflation.
It is hard to see how the two moves can work in tandem with the Stamp Duty cut designed the stimulate the market and the interest rate rise likely to slow it down!
So how do we navigate through this?
To those coming to the end of deals, taking out a new mortgage or currently on their lender’s variable rate, my advice, dependant on your circumstances, remains to fix your mortgage rate for three, five or even 10 years.
Rates are not as generous as they were, but it is still worth doing.
Fixed rates enable house buyers to know in advance what their mortgage bill is going to be for a set period and ride out any increases or falls in mortgage rates in the meantime.
Another rate rise is probably not far off and fixing to a set rate for the coming years will protect you from rising bills further down the road.
For a free, no-obligation discussion on any mortgage or insurance-related issue, please give me a call on 01723 384558 or 07767 692 653 or email me at mgrayshan@googlemail.com
*Figures courtesy of MoneyMail https://www.thisismoney.co.uk/money/mortgageshome/article-11245647/Joy-time-buyers-better-11-250.html?ico=mol_desktop_money-newtab&molReferrerUrl=https%3A%2F%2Fwww.dailymail.co.uk%2Fmoney%2Findex.html&_ga=2.79015828.1404141640.1664180069-1000032396.1624521434