Mortgage borrowers and landlords were largely missed out of today’s Autumn Statement, with several industry commentators expressing their disappointment.
While the Chancellor announced an extension to the Mortgage Guarantee Scheme for first-time buyers until June 2025, Perenna chief executive Arjan Verbeek called this a “quick fix”.
“While any extension to the mortgage guarantee scheme will be welcomed by first-time buyers, it is only a quick fix,” says Verbeek.
“The reality is that even would-be homeowners with a 5% deposit may find themselves priced out and unable to borrow a large enough loan to get onto the housing ladder. This is, in part, due to a mortgage market dominated by short-term fixed rate products.
“This lack of choice puts all the risk on hard-pressed consumers, limiting their borrowing power at a time when house-prices remain stubbornly high. Instead, we must build the foundations of a fairer housing market increasing the availability of long-term fixes, which boost affordability by letting consumers borrow up to 30% more.”
Pexa UK chief executive Joe Pepper said Jeremy Hunt’s plans provide “little relief” for homebuyers and homeowners.
“Those having to remortgage imminently will most likely be forced to pay far more than they do now, despite mortgage rates beginning to fall,” says Pepper.
“This is only going to exacerbate existing affordability problems. Many buyers will be waiting for fixed rates to become more competitive before progressing purchases, even with lower deposits and a green incentive on offer.”
Mortgages for Business managing director Gavin Richardson says support for landlords was needed from the statement.
“Instead we’re still stuck in landlord limbo,” he says.
“Plans to abolish Section 21 ‘no fault’ evictions in the Renters’ Reform Bill are still on hold as we wait for the court system to be reformed.
“Currently, it takes six months for landlords to regain possession of their property following a legitimate claim. Landlords have lost confidence in the courts and are concerned about the security of their investments without Section 21 in place. We want the government to set an eight-week target for processing times for possession claims before abolishing Section 21. The buy-to-let community is still waiting for that.“We wanted to see Capital Gains Tax relief being made available for landlords when they sell a property to a sitting tenant or first-time buyer — and then invest in a new property to let. That hasn’t materialised.“Landlords needed the Stamp Duty Land Tax surcharge reviewed. They didn’t get it. “
“However, it will be a disappointment to many as the move would likely have assisted some first-time buyers or young families looking to move into larger homes, as well as being an attractive proposition for potential overseas buyers at the higher end of the market, which tends to contribute the majority of the SDLT receipts.”
Coventry Building Society head of intermediary relationships Jonathan Stinton, adds: “We hoped today would be the day, but it looks like we’ll be waiting until at least March for the long-awaited Stamp Duty announcement.
“It’s clear that one way or another Stamp Duty changes are on the horizon – the Chancellor can either orchestrate the change through a considered reform, or he can ignore it and let the temporary relief lapse. Let’s hope it’s not the latter, because that choice would see homebuyers paying an extra £2,500 on an average priced home, come March 2025.”
