They are lining up with their wish lists… but hopes aren't high
Chancellors’ statements don’t come along every day, so they are always something of an event within the political arena, and for the financial services industry too, of course.
Today, Rachel Reeves makes her Spring Statement to the House of Commons at 12.30pm, and it’s been hotly anticipated, as the – some would say – beleaguered Chancellor seeks to calm nerves about a seemingly fragile economy.
Whether that’s because of the huge deficit the Government inherited from the Conservatives’ mismanagement over 14 years – according to Labour, at least – or because of the fallout of COVID and enduring global instability, due to conflicts in Ukraine and the Middle East, and the tariff-hungry President Donald Trump, is anyone’s guess.
Some commentators have even branded today’s event as a mini-budget – God help us (we know how that ended up last time). But, there’s no suggestion - for now at least - that we’re about to hear anything quite as dramatic as the Trump and Kwarteng-conceived statement of September 2022. But you never know… So, what do mortgage brokers want to hear from their Chancellor in the Spring Statement - what would put a…er… spring in their step?
Gerard Boon (pictured left), managing director at Boon Brokers, acknowledges that although his brokerage has grown, it has seen its buy-to-let business halved. “Many other mortgage brokers have experienced a similar loss in business due to the poor market,” Boon said. “The Chancellor needs to address an imbalance in the buy-to-let market as soon as possible. Rental outgoings for tenants are spiralling. A significant driver of this is that many small private landlords are selling their rental properties to residential or corporate buyers, due to high-cost market conditions. As a result, rental prices are increasing due to a lack of competition and a shortage of rental housing supply.” He added: “At a time when the buy-to-let market is becoming increasingly unattractive for landlord investors, the government should be incentivising more small private landlords to join the market. As a country, we are crying out for more smaller landlords, who perhaps own just one or two rental properties, to join the market to create pricing competition. This additional competition would help relieve the rental inflationary pressure on tenants, meaning that they can save and get onto the housing ladder in a shorter time-frame.”
Kasia Makarewicz (pictured second from left), senior mortgage and protection adviser at Step by Step Financial Solutions declared: “I am hoping for policies that make homeownership more affordable, not just for those with a treasure chest buried in the garden! On a more serious note, policies that encourage housing supply, provide targeted support for first-time buyers and promote mortgage affordability would be welcome steps in ensuring a resilient property market.” Some of these could include measures such as targeted Stamp Duty relief for first-time buyers, incentives to boost housing supply, incentives for green products, and initiatives to improve access to affordable mortgage products, suggests Makarewicz. “A balanced approach to economic growth and inflation control will be key in providing borrowers with the confidence they need in these uncertain times,” she urged.
For Katrina Horstead (pictured second from right), co-founder and director of Versed, measures that support affordability and market stability are key. “A targeted approach to stimulating homeownership, whether through support for first-time buyers, reform of stamp duty, or incentives for lenders to offer more competitive rates would be welcome,” Horstead said. “Addressing the impact of high interest rates on borrowers, particularly those coming off fixed deals, should also be a priority.”
Meanwhile, Ben Groves (pictured right), director of founder at Yomo Finance, is focused on the challenges facing those trying to get on to the property ladder. “Personally I would love to see some positive news for first-time buyers,” said Groves, “a return or a reshaping of Help-to-Buy, a reversal of the Right-to-Buy incentive reduction, and a complete change in Stamp Duty. Asking for quite a lot, but the government keep smothering the opportunities for first-time buyers. For landlords, a reversal of the 5% Stamp Duty changes and allowing properties to move more freely from personal to limited company, also generally scrapping the National Insurance changes so that businesses are not crippled, which has an effect on us and our clients.”
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Broker Luke Senior is not feeling entirely positive about the state of the UK. “I’d just love the Government to fix something, anything, everything is broken!” he said. “I’d like to see some commitments to reforming Stamp Duty. My own view would be that there should be some tax payable on every transaction, but the current rules make people think twice about moving. From next week, someone wanting to purchase a £300k property will be left with a bill of £5k. With legal fees and estate agent fees if selling, you’re looking at £10k.” He added: “Then, some changes to the rules on HTB (Hard to Borrow)/LISA (Lifetime ISA), more specifically the removal of the limit on the purchase price.”
Meanwhile, Samuel Whittlesea, mortgage adviser at Whittlesea Mortgages, has tax on his mind. “An increase to basic rate income tax threshold is long overdue and reductions to the rate of NICs and corporation tax would allow companies to invest in their workforce and our economy, benefiting the whole nation through growth and – ironically - more tax revenue to help support UK financial pressures,” he observed. “It’s a pipe dream, I fear, as the current government appear to have little interest in growing our economy.”
George Sanford, specialist mortgage adviser at Vibe Finance, is clear about what he would like to hear in the Spring Statement. “I think the main things would be:
Capital Gains Tax (CGT) adjustments - this could assist landlords looking to exit the market without swallowing large CGT bills; a simplified planning process with faster approvals for residential developments and brownfield incentives to address housing shortages, and mortgage interest relief. A partial reinstatement of mortgage interest deductibility could help landlords struggling with rising costs.”
And last but not least, what does broker Luke Hollingdale, a broker at Mojo Mortgages want from the chancellor? “Extend stamp duty concessions,” Hollingdale said. “Boost homebuyer affordability, review the FCA stress test guidelines to help with affordability, and housing stock growth plans.”
Watch this space…
