The news of the stamp duty holiday extension and Mortgage Guarantee Scheme in today's Budget has been widely welcomed by the industry but has also attracted some criticism.
The news of the stamp duty holiday extension and Mortgage Guarantee Scheme in today's Budget has been widely welcomed by the industry but has also attracted some criticism.Much of the industry expected the measures outlined by Chancellor Rishi Sunak (pictured) today and some believe the changes will give the property market a much needed "boost" to turn Generation Rent into Generation Buy.
Iain McKenzie, chief executive of The Guild of Property Professionals, said: “The Chancellor gave the property market a double shot in the arm today, with a boost from the stamp duty holiday extension and 95% mortgages.
“Extending the stamp duty holiday until the end of June, then phasing it out until September should help avoid a sudden downturn in prices caused by the much-feared cliff-edge end.
“With the zero-rated stamp duty limit extended to £250k until the end of September and the average UK house price being £252k, it means that thousands of people can benefit from this incentive - particularly first and second-time buyers.
“The government is really looking to turn Generation Rent into Generation Buy.
“While 95% mortgages are mainly a positive initiative that could help first-time buyers get onto the property ladder, this lending must be responsibly targeted."
Nigel Purves, chief executive of Wayhome, argues that despite the measures put forward in the Budget, the affordability issue for renters goes far deeper than the deposit.
He said: “The headline-grabbing 95% mortgage policy is politically astute, but it is a band-aid on a bullet wound.
"The affordability issue for renters goes much deeper than the deposit. Mortgage lenders calculate their lending by multiplying household income – and with the average house price in England coming in at just under £270,000, it means that you’ll need quite a hefty household income to get a 95% mortgage to afford to buy it.
"If the government is truly committed to turning Generation Rent into Generation Buy, it must work together with the property industry to raise awareness of innovative ways to help people take their first step onto the homeownership ladder.”
Virgin Money, who has committed to being one of the first lenders to implement the Mortgage Guarantee Scheme, released a statement welcoming the government's proposals in the budget today.
A Virgin Money spokesperson said: “We welcome the government’s support for borrowers with a smaller deposit and we’re pleased to say that we will be an active participant in the Help to Buy Guarantee Scheme.
"We know how important it is that first time buyers get the right support and we look forward to launching Virgin Money Help to Buy mortgages to support this segment of the mortgage market.”
Nick Sanderson, chief executive at Audley Group, believes that the measures announced today will not be supporting those downsizing or moving into housing with care.
Sanderson added: “The stamp duty holiday was implemented to get the market moving and wouldn’t easily withstand the shock of an immediate cancellation which the Chancellor has rightly recognised.
"However the stamp duty holiday has succeeded in some parts of the housing market but not all of it.
"Yet this Budget focuses on targeted measures at the wrong end of the market. 95% mortgages will primarily benefit first-time buyers.
"But there is no support for those downsizing or moving into housing with care.
"Supporting this end of the market would have a significant impact on the whole housing market, but has been largely neglected.
"This is a missed opportunity.”