The start of the new financial year has already introduced some key changes to the UK housing market. Here, we take a look at the biggest updates affecting existing homeowners and first time buyers looking to get on the property ladder in 2022.
For many, the start of the new financial year traditionally marks a clean slate and a period of new beginnings and that certainly seems to be the case for the UK housing sector this April. With the news that long-awaited reforms to ground rent charges are on the horizon, it looks as though there’s finally a glimmer of hope amongst the growing concerns over cost of living and the conflict in Ukraine.
But, it’s not only ground rents that are making property headlines. With a raft of new buying schemes coming into effect and lenders reporting a buoyant mortgage market in spite of economic uncertainty, the wider property outlook is also looking promising.
Here’s a brief rundown of the main property updates coming out of 2022 so far:
Bans to ground rent charges
The final new buying scheme coming into effect is an equity loan scheme, which is again available to both first time buyers and home movers. Purchases using Proportunity to buy will be able to borrow up to £150,000 towards buying a new build property. The loan is immediately repayable, with interest rates starting at 6.99% and is also subject to a £999 product fee.
The Government has announced it is banning ground rent charges on new residential leases effective 30th June 2022. This means that anyone renewing their lease or buying a new build leasehold property will no longer have to pay a ground rent charge. The move is the first in a line of ground rent reforms the Government is introducing, and follows measures announced last year to give homeowners the right to renew their lease to 990 years at zero ground rent.
New buying schemes
While buying schemes are nothing new, this year we’re seeing three new types of scheme come into effect, which are set to benefit both first time and repeat buyers.
First Homes
The first of these schemes is called First Homes. This is a Government initiative that allows first time buyers to purchase a new build home for 30-50% less than market value. The scheme will be open to first time buyers above the age of 18 with a maximum household income of £80,000 or £90,000 in London. Applicants will also need to qualify for a mortgage at least half the value of the home they wish to purchase to be eligible.Deposit Unlock
Deposit Unlock is a buying scheme eligible to both first time and repeat buyers. Exclusive to new build properties only, it enables buyers to purchase a new build house or flat with just a 5% deposit, making it especially beneficial to high earners with little savings. Developers that opt into the scheme simply pay a 2.6% premium calculated on the agreed purchase price.Proportunity
The final new buying scheme coming into effect is an equity loan scheme, which is again available to both first time buyers and home movers. Purchases using Proportunity to buy will be able to borrow up to £150,000 towards buying a new build property. The loan is immediately repayable, with interest rates starting at 6.99% and is also subject to a £999 product fee.
Mortgage demand is strong and continues to increase
With energy price hikes and cost of living concerns dominating the news headlines as we entered the new tax year, some began to speculate that a property downturn wouldn’t be far behind.
Latest news from the Bank of England, however, paints a more optimistic picture, with the revelation that house purchases lifted in the first quarter of the year and are expected to continue to increase over the coming months.
The report also details that lenders expect to see a higher demand for remortgages in the second quarter of 2022, despite inflation rising to its highest level since 1992 and interest rates lifting three times in four months.
While the future remains to be seen, those with a vested interest in house prices holding, will no doubt be encouraged to hear that the appetite for housing stock and mortgage products so far remains unhindered by cost of living rises.
Looking to buy or remortgage in 2022?
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