Three schemes to help buyers get on or move up the Norfolk property ladder

Young african woman holding home keys while hugging boyfriend in their new apartment after buying re

As house prices rise potential buyers, especially first-time buyers, may be feeling confused about how to get on to the housing ladder - luckily schemes like Help to Buy and the new Government-backed 95% Loan-to-Value mortgages could help - Credit: Getty Images/iStockphoto

We are only six months into the year but it’s already been a busy one for the local property market, as Norfolk has become even more sought-after.

For many, the desire to move has been spurred on by the pandemic.

So much time confined in one place during successive lockdowns has encouraged many to re-evaluate their needs, choosing to relocate to where there is more outdoor space, to be closer to family, or to help accommodate the extra time they’re spending at home – it’s become where they work, now, as well as where they live, and for many who have adapted and changed their habits, it’s also where they’re choosing to work out and socialise, too.

For others it’s been about creating a better work-life balance – moving to the country or the coast, say, instead of big cities, where there is more fresh air and more green space to help improve their quality of life. 

A number of home-buying incentives – including those aimed at first-time buyers or those with smaller deposits – has also helped to stimulate the market even further. Prime Minister Boris Johnson has said that he wants to turn ‘Generation Rent’ into ‘Generation Buy’, and changes announced in the Spring Budget back in March, certainly reflect that – although increased demand has also put property prices up.

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Prime Minister Boris Johnson has, in the past, said that he's determined to turn 'Generation Rent' into 'Generation Buy' - Credit: Getty Images/iStockphoto

“As the sun shines and summer returns, the housing market is still incredibly buoyant, driven by buyer demand and of course many incentives from the Government,” says Jamie Minors, managing director of Minors & Brady, which has branches across Norfolk and Suffolk.

“With the Stamp Duty holiday coming to an end shortly, and the 95pc Loan-to-Value mortgage products available, home-movers and first-time buyers can put down as little as a 5pc deposit to purchase a home. This makes purchasing more affordable and more likely for the first time buyer’s cash flow – but of course it’s taken in the other hand as house prices have surprisingly risen 10.9pc from May 2020 to May 2021.”

Samantha Withers, founder and director of Coast and Country Estate Agents, also welcomes the incentives, especially as low housing stock has become an obstacle to potential first-time buyers.

“The return of 95% mortgages and interest rates reducing couldn’t have come at a better time in the housing market as house prices continue to rocket,” she says. “The shortfall in housing supply continues to be an obstacle for potential buyers as it continues to drive the house prices up, so these attractive rates and Government-backed schemes are certainly a step in the right direction in helping first-time buyers on to the property ladder.”

Wooden houses with yellow arrows up. housing boom, property market growing, high demand for real est

House prices are being driven up by a shortfall in housing supply, as demand has increased - which also means first-time buyers, or those with low deposits, are finding it difficult to get on to the property ladder - Credit: Getty Images/iStockphoto

But while the incentives are an attractive option for new buyers, Samantha is cautious to remind buyers of the hidden costs of moving. “Although there is money to be saved on mortgage payments, there are still a lot that home-buyers need to factor into their ‘cost-of-moving’, including legal fees, surveys, local authority searches and removal costs. 

“We would also recommend buyers to make a budget planner to make sure the household bills and insurance are all affordable and comfortable.”

Here we take a closer look at some of the most popular home-buying incentives available right now. 

Stamp Duty holiday 
It’s highly unlikely that anyone looking at homes now will be able to qualify for the full Stamp Duty holiday, which was announced last year and then extended in the Chancellor’s Spring Budget. 

Under the initiative, many buyers have been able to avoid paying Stamp Duty Land Tax on properties up to the value of £500,000. Buyers have been able to make genuine savings – up to £15,000 – through the tax relief. 

But from the end of June, there will be a staggered return to previous Stamp Duty rates. From July 1 until September 30, the tax cut threshold will reduce to £250,000 – meaning you won’t pay any Stamp Duty on the first £250,000 of the property purchase price. It will then return to the ‘normal’ rates on October 1, with no tax to pay on the first £125,000. 

From July 1, a separate Stamp Duty tax break will continue for first-time buyers on properties up to £300,000, and then 5pc on anything up to £500,000. To qualify, the property must be their only or main residence and they must never have owned a residential property in the UK or abroad. 

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The return of 95% Loan-to-Value mortgages, largely backed by the Government, will help first-time buyers or those with low deposits - Credit: Getty Images/iStockphoto

5pc deposit, 95pc mortgages 
In the Spring Budget, Chancellor Rishi Sunak also announced the return of 95pc mortgages after most vanished from the market last year in the midst of a tough economy. 

The Government-backed scheme is attractive to first-time buyers and those with smaller deposits, including homeowners who require a 95pc Loan-to-Value mortgage. Major banks and high street lenders, such as Barclays, HSBC UK, Natwest, Santander and Lloyds Banking Group have all launched related products.  

The mortgage operates in the same way that others do, but because it’s Government-backed, it offers lenders more reassurance. 

The scheme is expected to run until December next year and applies to Loan-to-Value mortgages on main residential properties up to the value of £600,000 – but it cannot be used 
on new-build properties. 

On May 20, Nationwide Building Society, Britain’s biggest building society, launched its own 5pc deposit scheme – without Government support. 

It says that the new mortgage range will be available to those looking for their first home as 
well as new customers who are moving, and they will only be available to borrowers who are employed.  

A portrait of happy young family with a toddler girl moving in new home.

Help to Buy, which applies to new builds, can also help those with small deposits - Credit: Getty Images/iStockphoto

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Help to Buy 
If you have a small deposit you may be able to get help with purchasing a new-build home under the Government’s Help to Buy Equity Loan scheme. 

Under the initiative, the Government can lend first-time homebuyers up to 20pc of the cost of a newly-built property, although regional price caps are in place, set at 1.5 times the average first-time buyer price in that region. In the East of England, this is set at £407,400. 

Customers pay a minimum deposit of 5pc and arrange a mortgage of 25pc or more to make up the rest. The equity loan is interest free for the first five years, and the scheme is in place until 2023. 

So far the scheme is said to have helped more than 270,000 people into home ownership, 82pc of whom are first-time buyers.  

“Housing, like most sectors, has experienced a slowdown during the Covid-crisis,” said Will German, director of Help to Buy at Homes England. 

“But Help to Buy continues to give homebuilders the confidence to keep on building at a more crucial time than ever.”