Q. Will the recent Budget make much difference to the housing market?
A. If I were a politician, or more specifically a member of the Government, then I might well say that it’s too soon to tell. Which it is, of course.
Nevertheless, there’s no doubt that the Chancellor could have done considerably more to help reinvigorate the market. Rather than merely extending the temporary £175,000 Stamp Duty threshold, for instance, he could have raised it all the way to £200,000. Better still, he could have used this golden opportunity to instigate a thoroughgoing revision of the entire Stamp Duty regime – something that practically everyone involved in the property industry has been urging the Government to do for years.
Alternatively, since the relative shortage of high loan-to-value mortgage finance is one of the biggest problems facing the market at the present time, Alistair Darling could have announced any number of measures designed to free up the mortgage market. Indeed, Team – the nationwide network of independent estate agents to which my own firm belongs – recently wrote an open letter to the Government suggesting a solution to this very problem, in the shape of a Government-backed Mortgage Indemnity Guarantee scheme. By effectively insuring lenders against any loss they might suffer as a result of a borrower defaulting on his or her mortgage, this would encourage them to start offering precisely the size of loans that prospective first time buyers so badly need.
Still, as they say, we are where we are, and there’s not a lot to be gained by dwelling on what might have been. Besides, at least as far as any further relaxation of Stamp Duty is concerned, it’s at least arguable whether the Government could actually afford it, given the parlous state of the public finances at the present time.
So, let’s end on a positive note. If you’re looking to buy a home worth up to £175,000 – and nationally, that covers around 60% of all properties – then the extension of the Stamp Duty “holiday” till the end of the year still represents a saving of £1,750. And for hard-pressed first time buyers who have somehow managed to scrape together a large enough deposit to get a mortgage, that is most definitely not to be sneezed at!