Shall I buy a new build during Stamp Duty holiday?
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We’re looking to move house early next year to take advantage of the Stamp Duty holiday. We have looked at a brand-new house on a development that claims to be really energy efficient and sustainable. We have a mortgage on our existing house which we have had for about 10 years so are planning to speak with them to find out if we can increase it a little to buy this time. Will it make any difference if we buy a new build?
Diane Fish of Smith & Pinching responds:
There are two main points to make here. Firstly, it is a really good idea to review what else is available on the mortgage market before signing up to a new arrangement with your existing mortgage provider. Presumably, you are no longer on a starter rate for your repayments so you may be able to get a better deal. It is also important to check if there are any early repayment charges if you switch provider at this point.
The second point is about buying a newly built home. Most new builds these days are meeting very high environmental standards and some lenders are encouraging this by giving preferential rates to purchasers who are buying homes with an A or B energy efficiency rating. These so-called green mortgages are now available from many providers and you may be able to switch to a green mortgage with your existing provider. They are available at a range of loan-to-value ratios, although anyone with a low deposit of 10pc or less may find it difficult to source a mortgage of any type at the moment. With the extended underwriting times being currently experienced, including valuation appointments, if you are thinking of beating the Stamp Duty holiday cut-off date – March 31, 2021 – then you need to start your moving process immediately.
I recommend that you speak with an independent mortgage adviser to review your current mortgage arrangement and to see what mortgage deals are available to you.
Your home may be repossessed if you do not keep up payments on your mortgage. There will be a fee for the mortgage advice. The precise amount will depend upon your circumstances, and the type of lending taken. Smith & Pinching’s minimum advice fee is £700. Any opinions expressed in this article do not constitute advice.
For more information visit www.smith-pinching.co.uk