The Budget offered two big policies to support the housing market. Buyers in England and Northern Ireland will be able to take advantage of a cut in stamp duty until the end of September while those purchasing their first home can get a government-backed mortgage worth up to 95 per cent of the value of their home.
But how will they work for people looking to buy a home?
Stamp duty holiday - what's changed?
The threshold at which you start paying tax (stamp duty) on the value of a home when you buy it was raised from £125,000 to £500,000 in July last year to boost the housing market.
In the latest Budget Rishi Sunak moved the deadline back to 30 June, after which the threshold comes down to £250,000.
From 1 October it returns back to £125,000.
Scotland and Wales have separate systems pf property taxation which are not affected by Sunak's stamp duty announcement.
What does this mean?
Until 30 June 2021, no stamp duty will be charged on a residential property bought for up to £500,000. This covers the majority of houses and flats in the UK.
From £500,001 to £925,000, buyers must pay 5 per cent to the government, rising to 10 per cent on the portion between £925,001 and £1.5m. Above £1.5m, stamp duty is 12 per cent.
For example, if you bought a house for £625,000 next month, you would pay nothing on the first £500,000 and then 5 per cent on the remaining £125,000.
That works out at £6,250 for the Exchequer.
Purchasers who complete between 1 July to 30 September will start paying stamp duty at 5 per cent from £250,000.
So the property mentioned above would attract a stamp duty bill of £18,750.
From 1 October, rates in England and Northern Ireland will revert to where they were before 8 July 2020:
Up to £125,000 - no stamp duty
From £125,001 to £250,000 – 2 per cent
£250,001 to £925,000 – 5 per cent
£925,001 to £1.5m – 10 per cent
Above £1.5m – 12 per cent
As before, each of the rates only applies to the portion of the value that is within that band, not the total value of the property.
First-time buyers only start paying stamp duty from £300,000.
What about low-deposit mortgages?
The government will encourage lenders to offer mortgages to buyers with deposits of as little as 5 per cent by backing a proportion of the debt.
Lloyds, NatWest, Barclays, Santander and HSBC will begin offering these high loan-to-value (LTV) mortgages on properties worth up to £600,000 from next month with other lenders expected to join as well.
What does it mean for house prices?
Both of these announcements are likely to push house prices up further in a market that is already booming despite severe economic problems, rising unemployment and only tentative signs of a fragile recovery.
The zero rate under £500,000 was a temporary measure (the “stamp duty holiday”) introduced last July after the number of home sales collapsed because most were prevented during the first lockdown in March and April.
Since then, prices have jumped across much of the country with Nationwide recording a 6.7-per-cent average rise in the year to February 2021. This is well in excess of wage growth and comes despite a severe economic crash and financial hardship for millions of households.
Property industry experts say this has been fuelled by the stamp duty cut, low mortgage interest rates and people seeking more outdoor space or another room for home working.
The new mortgage scheme is much the same as the previous Help to Buy scheme which helped to push up prices and, according to the national Audit Office, benefited large numbers of people who could have afforded a home without government help.
The other main beneficiary of these policies will be property developers. Taylor Wimpey, Barratt and Persimmon all saw their share prices rocket on Wednesday.