Measures also include extending the stamp duty holiday to June, investing in chronically underfunded NI Water, and supporting modern methods of construction.
The UK’s Budget published in March has extended the stamp duty holiday on house purchases under £500,000.
In both England and NI, the reprieve which was due to end on March 31st has been extended to the 30th June. This means 90 per cent of people buying a new home will continue to pay no stamp duty at all.
The UK Chancellor Rishi Sunak also confirmed a new mortgage guarantee scheme, available UK wide, to incentivise lenders back into the 95 per cent mortgage market.
The initiative will encourage banks and building societies to offer the high loan to value (LTV) mortgages by giving them the chance to buy a guarantee on the portion of the mortgage between 80 and 95 per cent.
So if a borrower gets into financial difficulty and their property is repossessed, the government will cover that 15 per cent portion of the lender’s losses. The scheme opened for new mortgage applications in April and will run until the end of 2022.
The NI Executive has separately announced it was borrowing £30 million to provide additional funding to NI Water “due to the strategic nature of its pressures”. The new investment should increase self-builders’ chances of getting a mains connection in the coming years.
In August 2020, NI Water had warned that its “failing wastewater infrastructure” was unable to offer connections to new houses and businesses in both urban and rural locations. The “chronic underfunding” has led to “inadequate environmental protection through increased sewer flooding and pollution,” NI Water said in a statement.
NI Water’s 2021-2027 business plan outlined a need for an investment programme in excess of £2 billion.
Modern methods of construction (MMC)
The UK Chancellor also announced a commitment to MMC in his March Budget.
The Housing Ministry will establish a taskforce designed to stimulate MMC housebuilding with £10 million of “seed funding”.
Flat pack provider IKEA is already working on delivering 750 modular homes over the next five years, in partnership with builder Skanska and housing association Abri.
The IKEA/Skanska partnership, called BoKlok, will build the houses at low and predictable costs with minimum waste. The completed homes are manufactured off-site and feature high quality IKEA fittings. They are then transported to the construction site for assembly.