Given the UK’s tough economic conditions and recent reports of stagnant growth, it’s not surprising there has been intense speculation ahead of tomorrow’s Autumn Statement. But what are Mortgage and Property professionals hoping to see in the detail?
Hints over the weekend allude to the Chancellor’s keenness to reboot economic growth. A key contributor to that can be the property sector and from talking with their clients, property finance specialists, Anderson Harris, shares the measures their clients desperately seek, given the difficulties they face.
- Extend the mortgage guarantee scheme for another year
The mortgage guarantee scheme enables lenders to offer up to 95% loans on properties up to £600,000 and with first time buyers increasingly active with the market, supporting the availability of high LTV mortgage products is important.
With rental prices at record levels and reducing affordable rental stock, the mortgage guarantee scheme has given banks the confidence to offer high LTV mortgages. The scheme was introduced in April 2021 and extended in January 2023, but it is due to come to an end this December.
2. Reduce Stamp Duty Land Tax across all residential property thresholds
After a year of raised interest rates to curb inflation, much of the middle and downsizing markets remain stagnant. Next-time buyers in the mid-market can no longer afford the additional cost of stamp duty on top of their property purchase. With the mid-market pausing their next move, downsizers are short of buyers and stuck in properties they desperately want to sell.
A welcome move called for by many Anderson Harris clients for many would be for the Chancellor to reduce the stamp duty percentages across all residential property tiers to free up the market again.
- Rethink Mortgage Interest Tax Relief
The buy-to-let sector has been targeted by the Government for almost a decade. A conveyor belt of measures has sought to dissuade people from investing in rental properties. It’s not surprising then that a shortage of rental stock from the exodus of landlords, exacerbated by high interest rates, has pushed rental prices to record levels.
With more landlords anticipated to exit the market in the coming year, and few incentives to attract them in, our landlord clients urge the Government to rethink mortgage interest tax relief and consider reinstating it. By encouraging landlords to stay, or indeed enter the market, it will deliver more, highly demanded, rental supply, curb price rises and thus reduce pressure on tenants.
Also hoping for some positive news from the Chancellor’s much anticipated Autumn Statement tomorrow, Lewis Prager , Managing Director at www.leeds-money.co.uk has been telling us what he’d like to hear from Jeremy Hunt given today’s challenging property market conditions, as follows:
“Tomorrow will be a pivotal moment for the UK economy. Record interest rate rises & inflation figures have plagued the headlines for the past several months. This Autumn budget must be striking. Ensuring the focus in on helping the majority of the public cope should be made a priority as too many are feeling the squeeze. The mortgage market rates are slowly decreasing & competition in the intermediary offering is a welcoming sight. Competition between lenders to have the best rates & products is great to see, finally!
“I am hopeful that the reported rumours/leaks are correct, such as tax cuts personally & potentially a stamp duty rise freeze or even a decrease to give the stagnated housing market a much needed boost! Any help to ensure the housing market stays buoyant would be an imperative announcement for this Autumn Statement.
“If I could wish for anything from tomorrow’s announcements, I just hope the Chancellor puts the British families first. That he sees the difficulties families are struggling with & keeps in mind how important mortgage rates are to households which is their largest monthly outgoing as many are seeing large jumps coming off lower than usual rates.
“And finally, last but not least, anything that might assist the huge number of people stuck renting a property as they have to wait for several years saving hard for a deposit to buy, would also be very refreshing to see.”
