As Sunak presents his 2021 budget, Paresh Raja, CEO of Market Financial Solutions comments:
“The 2021 Spring Budget was always going to be a delicate balancing act. With the UK transitioning out of lockdown, Chancellor Sunak has had to achieve three things: firstly, the provision and extension of financial support for businesses and consumers affected by the pandemic; secondly, the introduction of policies that encourage consumer spending and investment activities; thirdly, finding ways of effectively containing spiralling public debt.
“I believe the Spring Budget effectively addresses each of these issues. However, the Government needs to be realistic about the future scenarios it could face, like a sudden surge in cases as lockdown restriction are eased, or a new variant disrupting the planned easing of social distance measures. Clearly, potential bumps in the road mean that the reforms announced today will have to be constantly revisited, so I expect a very fluid policy strategy in the months ahead.”
“When it comes to bricks and mortar, extending the stamp duty holiday is exactly what the property market needs. The appetite among buyers remains strong, and it makes sense for the Government to build on this momentum through targeted tax reliefs. The market response will be immediate – I anticipate agencies and lenders will receive another surge of enquiries in the coming 24 hours, and this should lead to a rise in property listings.
“My advice is for buyers and sellers to act sooner rather than later. Three months may seem like a substantial amount of time, but with mortgage providers taking longer to process applications, loan delays could increase the risk of transactions not being completed in time. In the two months following the initial announcement of the stamp duty holiday on 8 July, a survey by MFS revealed that 32% of prospective buyers had been denied a mortgage.
“That is why buyers need to ensure they engage with lenders who can deploy finance quickly, be it a mainstream or alternative finance provider. Failing this, there is a risk of buyers missing out on this new holiday deadline due to factors outside of their control.”