While there were some positive references in the Budget for the housing market, especially pledging £5bn for housebuilding, it felt once again like an afterthought.
For the government to meet its 1.5mn new homes target, more will need to be done to succeed where the Conservatives did not.
It is relatively positive to see the government discuss making the mortgage guarantee scheme permanent in the broader Budget announcement.
However, there is a concern that the scheme could result in artificial demand which will drive up house prices and further impact first-time buyer affordability.
More broadly, policies which help lenders to do a greater share of high loan-to-income lending would be more beneficial to borrower affordability, and these will need to be discussed in collaboration with industry regulators.
For landlords, raising the stamp duty surcharge to 5 per cent for second-home buyers is going to be particularly challenging.
For landlords with smaller portfolios, buy-to-let as a means to supplement income is looking less attractive and we’ve already heard reports of chains breaking as landlords pull out of deals.
However, it was helpful that capital gains was left unchanged for buy-to-let and residential properties, especially given the backdrop of increased demand from tenants and a reduced availability of privately rented homes.
On the residential side, having no reference to extending the stamp duty exemption past March 2025 may well to create a rush of borrowers looking to secure a property ahead of the deadline.
As we've seen in the past, this will likely cause unwanted pressures on lenders, brokers and the conveyancing sector.
Overall, while there were encouraging comments made on housebuilding, the devil will be in the detail.
If we’re serious about helping improve affordability, this will be crucial. Hopefully more strides to impact the mortgage market in a positive way will come to light as the government continues to get its feet under the table.
Tony Hall is head of business development at Saffron for Intermediaries
