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Buy Your New Home With a 5% Deposit From April 2021

FinanceHomes|31 March 2021
From April 2021, you'll be able to buy any home under £600,000 with a 5% deposit. Find out how you can make buying your new Strata home even more affordable.
Buy Your New Home With a 5% Deposit From April 2021

New government-backed 5% deposit scheme to begin April 2021

The government has recently announced the return of the 5% deposit scheme in 2021, with a new Mortgage Guarantee Scheme that’s fully backed by the UK government. The scheme is not restricted to first-time buyers, so it can be used by anyone, whether you’re just getting started on the property ladder or upgrading to a bigger home. 

The new scheme means that you can buy any home under £600,000 with just a 5% deposit, and own your first or next home even sooner – and taking advantage of the extended Stamp Duty holiday can make buying your new home even more affordable in 2021. 

What is the new 5% mortgage deposit scheme?

Lenders who offer mortgages to home buyers with a 5% deposit will be backed by the government, who will guarantee those mortgages. This will make it easier for people who don’t have a large deposit to get onto the housing ladder or to progress to a larger home sooner. 

The new Mortgage Guarantee Scheme was announced as part of the UK Budget by the Chancellor, Rishi Sunak, who also confirmed that some of the UK’s largest lenders will begin offering 5% mortgages soon, including Lloyds, NatWest, Santander, Barclays and HSBC. 

During the coronavirus epidemic, 95% mortgages were few and far between – which is why the government is introducing this new scheme, to encourage homeowners to buy and to encourage commercial lenders to reintroduce mortgages with a 5% deposit. 

The new scheme begins in April 2021, and will be available on new mortgages taken out until 31st December, 2022, so there’s plenty of time to find a new home that’s perfect for you and take advantage of a smaller deposit with the new government scheme. 

The Mortgage Guarantee Scheme works in a similar way to the Help to Buy initiative that was launched in 2016, and aims to help young people get on the property ladder or make their next move to a new home. The economic impact of the pandemic has made it increasingly difficult for young people to buy a home – but this new incentive gives you the opportunity to buy your first home or even move to a new property with just a 5% deposit. 

Take advantage of the Stamp Duty holiday

If you’re thinking of buying a home, you can also maximise your purchasing potential by making the most of the Stamp Duty Holiday, which is being extended until 30th June 2021, or the end of September 2021 for homes valued up to £250,000. If you purchase a home and complete the sale before 30th June, you won’t pay any Stamp Duty on houses up to the value of £500,000. 

That means that you could purchase a house in one of our beautiful developments, such as Esteem and Adore in picturesque North Yorkshire, taking advantage of the Stamp Duty holiday with just a 5% mortgage deposit needed. 

If you’re dreaming of a first home, or planning your move to a new home, Strata are here to help. You can reserve your dream home online for just £100, and we’ll be here to help guide you through the options available to help you buy your new home. 

If you’d like to know more about the Mortgage Guarantee Scheme and how it could work for you, our team are happy to help. Get in touch or find your nearest development to book an appointment today.
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