Money Saving Expert Martin Lewis issues mortgage warning amid stamp duty changes

Christel Deskins

Money Saving Expert Martin Lewis has issued a warning to house buyers and homeowners with mortgages. The personal finance guru explains changes to stamp duty could end up having a knock-on effect in his latest Money Saving Expert newsletter. Combined with tightening criteria due to the coronaviurs pandemic, it means […]

Money Saving Expert Martin Lewis has issued a warning to house buyers and homeowners with mortgages.

The personal finance guru explains changes to stamp duty could end up having a knock-on effect in his latest Money Saving Expert newsletter.

Combined with tightening criteria due to the coronaviurs pandemic, it means high loan-to-value mortgages – for example, small deposits or little equity – are no longer available.

And Lewis, who is popular with fans of ITV’s This Morning and Good Morning Britain, has suggested 15 per cent mortgages could be the lowest lenders will offer.

Stamp duty is a tax paid by people buying properties but it does vary slightly across the UK.

In England and Northern Ireland, buyers pay Stamp Duty Land Tax.

The government’s plans have temporarily increased the stamp duty threshold to £500,000 for property sales in England and Northern Ireland until March 31, 2021.

Anyone completing on a main residence costing up to £500,000 before then will not pay any stamp duty, and more expensive properties will only be taxed on their value above that amount.

This will save buyers as much as £15,000, if they are buying a property of £500,000 or more, reports the Liverpool Echo.

With the introduction of the tax holiday, demand for property has sky rocketed, meaning mortgage lenders have struggled to cope.

According to Martin Lewis, at the start of the pandemic there were 386 mortgages with a five per cent deposit.

Now there’s just one standard mortgage at five per cent, while any others available have stringent conditions attached, such as parents as guarantors.

There were 751 at ten per cent but now there are just 57.

So for many people, 15 per cent is the new floor for deposits, and even above that, rates are creeping up as the cheapest two year fix was 1.09 per cent in July – with a 40 per cent deposit – but now, it’s 1.24 per cent.

The money whizz said sadly, there are no perfect solutions and for those who can, he suggests waiting and saving up instead.

You can read Martin’s full set of tips and advice on his  weekly Money Saving Expert email.

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