UK Housing Market Update

It would be fair to say that the world has been affected in so many ways since the onset of the global pandemic and throughout the past year, the Government has introduced a number of initiatives designed to stabilise and provide incentives to kick-start and boost the economy amongst various sectors.

We’ve picked out 4 Key Initiatives that have had an impact on the UK Housing Market that could impact you.

1. Stamp Duty Holiday Extension

In an attempt to help boost the housing market, the Chancellor of the Exchequer, Rishi Sunak suspended Stamp Duty on the first £500,000 of all property sales in England and Northern Ireland. This “stamp duty holiday” was initially due to end on March 31st this year however, this has now been extended for a further 3 months ending 30 June.

To avoid last-minute difficulties from arising, the tax-free threshold will taper off from £500,000 to £250,000 for a further 3 months until 30 September. The threshold for the nil rate of Stamp Duty will then revert to its usual level of £125,000 on 1 October.

2. Help for First Time Buyers

This could be an ideal time for first time buyers to get on to the property ladder. The Stamp Duty Holiday Extension and record low interest rates for mortgages combined can possibly provide much needed support to buy your first home.

Some lenders have relaxed lending criteria allowing first time buyers to borrow 5.5 times their income when taking a 5 or ten-year fixed rate mortgage with a 10% deposit.

Bringing these numbers to life could mean that a couple with a combined income of £50,000 can now borrow £275,000 rather than £225,000 in the past.

From April, the Chancellor’s 2021 Spring Budget  introduced the 95% Mortgage Guarantee Scheme helping people to buy their first home with just 5% deposit. This initiative supports Prime Minister Boris Johnson’s pledge to turn “generation rent into generation buy” You can click here to learn more about this initiative.  

3. Competitive Mortgages on Offer

The Bank of England Base Rate dropped from 0.25% to 0.1% to cushion the impact of the Coronavirus Pandemic. The Governor of the Bank of England, Andrew Bailey said last year that the rate could possibly become negative in the future however, in the most recent base rate meeting in February 2021, the Bank of England decided to retain the base rate at 0.1%

The cost of obtaining and servicing a mortgage is at an all-time low and mortgage lenders are being creative to entice homeowners. A quick check of the lending market reveals some very interesting offers:

Re-mortgaging packages offering free valuations and no product fees

4. Tax Relief

Selling certain properties can be a tricky process as tax liabilities may arise. Typically, these liabilities relate to Capital Gains Tax (CGT) and Inheritance Tax.

CGT and Inheritance Tax will be frozen until April 2026 meaning the CGT threshold will be held at £12,300 for the 2021/22 tax year and Inheritance Tax will remain at £325,000.

CGT freeze means anyone selling an investment property or a second home will have to pay capital gains tax of 28% on any increase in the property’s value since they first bought it above £12,300 (couples who jointly own a property can combine their CGT allowance to £24,600).

Currently, Inheritance tax is paid at 40% on all assets not left to a spouse or civil partner worth more than £325,000. This increases to £500,000 if a home is left to your children or grandchildren.

Are you thinking about selling your home? Contact Nicholas Humphreys (Sheffield – Broomhill & Crookes) for a free market appraisal of your property. Ask us about our:

  • “No sale, No fee” promise
  • Marketing strategy to attract more Buyers to your property
  • Professional photography and video service
  • “Treating Customers Fairly” policy. We never lock people into unfair term contracts with hidden penalty clauses

Call us on 0114 470 4715 or e-mail to

Our office is open 7 days a week from 8am to 8pm.