Housing experts fear Hunt’s budget will shun building for borrowing
Speculation is rife Jeremy Hunt could introduce a 99 per cent mortgage scheme
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Your support makes all the difference.Mortgage brokers and financial experts have said that Jeremy Hunt’s Spring Budget is likely to “underwhelm” and have urged him to tackle the country’s housing crisis and get more homes built.
The chancellor faces a high-pressure situation when he presents his fiscal plan to the House of Commons next week as the country is in a recession and the Tories are miles behind Labour in the polls, with a General Election looming.
One area of high interest will be what, if anything, Mr Hunt does to stimulate the property market or make moves to deal with the housing crisis by relaxing planning restrictions or building more homes.
Speculation is rife that the chancellor will look at trying to woo younger voters by offering a 99 per cent mortgage scheme which was first reported by The Independent in January.
Banks and building societies normally require a 10 per cent deposit but under this proposed scheme you would only require one per cent, meaning a cash outlay of only a few thousand pounds.
In addition, Mr Hunt could make changes to Stamp Duty, a move that would be popular with Tory backbenchers, but recent reports suggest is less likely in this fiscal statement.
Stephen Perkins, managing director at Yellow Brick Mortages said any plans for the housing market were likely to “underwhelm”.
He said: “Almost certainly it [the Budget] will include their touted 1% deposit mortgages, that won’t help many who cannot afford a mortgage for 99% of their needed house price, and maybe they will bring out the stamp duty holiday banners for another use, again to little avail as first time buyers can already buy up to £425,000 without paying stamp duty.
“I would be truly amazed if anything innovative and useful was announced in the Spring Budget, and ultimately Hunt has higher burning priorities to consider.”
Ranald Mitchell, director at Charwin Private Clients said that more broadly “tax cuts and concessions” will be announced to try and reinvigorate the Tories’ electoral chances.
In terms of the property market, he added: “The 99% mortgage scheme will be unveiled and whilst it will open the door for some, its effectiveness remains open to debate.
“Further planning relaxation and development of brown belt could also well be on the cards, as Jeremy Hunt attempts to embed a longer term strategy for house building.”
And Lewis Shaw, owner and mortgage expert at Shaw Financial Services, urged the chancellor to “leave the property and mortgage market well alone” and concentrate on building homes.
“It’s clear they don’t have any policies on how to address the things we actually need: build more homes, make people better off and produce national infrastructure that works.”
Craig Fish, director at Lodestone Mortgages & Protection, agreed that the focus of Mr Hunt’s energies next week should be on getting Britain building again.
“What he will do and what he should do are two entirely different things. What he should do is leave well alone, and simply address the biggest issue the UK faces, the UK’s housing shortage. Get more houses built. Its that simple.
“What he will likely do is try and rescue voters by making unaffordable tax cuts, fiddling with stamp duty by perhaps abolishing it for downsizers and introducing a ridiculous 1% deposit mortgage scheme. I have to say I am genuinely worried about what he has planned.”
And Samuel Mather-Holgate, independent financial advisor at Mather and Murray Financial said:“Gimmicks like the 1% deposit are poor policy from a floundering government.
“Structural, supply side policy needs to be implemented that incentives builders to create more affodable housing, and then creates an environemnt where buyers have confidence in their decisions to buy.
“Whatever Hunt proposes will be a sticking plaster of a gaping wound and will probably increase asset prices and be counter productive.”
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