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Since the beginning of the global pandemic in early 2020, and necessary lockdowns that followed, there can be few sectors of the NI economy that can say their business has not been adversely affected.
However, one such sector that seems to be offering some hope amongst the doom and gloom associated with COVID-19 is the residential housing market. We have found many of our residential developer and construction clients have been able to continue, and in some instances grow, their business since the start of the pandemic.
The so-called “boom” in residential house sales since mid-2020 has been partly caused by the Stamp Duty Land Tax (“SDLT”) holiday introduced by the Chancellor of the Exchequer. This meant the threshold on properties attracting this tax increased significantly in order to stimulate the housing market i.e. people purchasing a house under £500,000 did not have to pay SDLT when purchasing a home. The UK government are under pressure from all sectors for this SDLT holiday to extend past the 31 March 2021 deadline to allow this part of the economy to continue thriving.
This spike in residential sales could also be sustained with the recent announcement from the Communities Minister Deirdre Hargey of a further £13m funding for Co-Ownership (a shared ownership scheme that helps first-time buyers to get on the property ladder) to assist to those looking to purchase their first home struggling to raise a deposit to purchase their own home.
Co-Ownership claim to have had an increase in applications as many people who could have taken out a mortgage before Covid-19, and the consequential lockdowns, no longer can due to mortgage lenders requiring higher deposits (in some instances double the amount pre-COVID-19) and tightening their lending criteria.
An increase in financial assistance to help first-time buyers, and a potential extension to the SDLT holiday, will be good news for many and not just those looking to purchase their first home. It is good news for the residential developers building affordable homes, the contractors, tradesmen and professional services used to construct these houses along with those involved in the onward sale of these homes.
This article has been produced for general information purposes and further advice should be sought from a professional adviser. For advice or information, please contact our Commercial Real Estate team at Cleaver Fulton Rankin.