Mortgage industry lukewarm on spring statement
The spring statement is scheduled for 12:30 on Wednesday 13 March.
The statement is expected to be an economic update and official response to forecasts provided by the office for budget responsibility rather than an announcement of budgetary decisions – these being reserved for the autumn budget.
A date has also yet to be set for the official spending review.
Adding further reason for the event likely being a subdued affair is the fact that the statement will take place one day after the Brexit meaningful vote.
We asked some key voices what they do expect from the statement in terms of housing and what they would like to see addressed.
John Charcol senior mortgage technical manager Ray Boulger says: “With all the voting happening in parliament this week I do not see the spring statement being prioritised in comparison to the Brexit vote… however, an area the government may touch on is mortgage prisoners.”
When asked what he would like to see in the statement, Boulger says that he wants to see the government mention new builds and big house builders. “There need to be stricter sanctions on the developers who are ripping people off. The profits posted by the big house builders show that they are exploiting the Help to Buy scheme for personal gain… I think the government should force the big house builders to compensate borrowers or not be allowed to sell through the HTB scheme.
“It is unlikely there will be any macroeconomics in this statement. The Bank of England is more likely to deal with this,” he adds.
Coreco director Andrew Montlake adds: “What will happen in the spring statement is difficult to predict with the decision on Brexit looming. I think that it has purposely been downplayed – there has been very little rumours surrounding the statement, which is unusually for a big event.
“I therefore believe that it will be a downbeat affair. The government at the moment has bigger fish to fry. It would be interesting if the government did touch on housing, but it is difficult for them to really do anything until after the Brexit decision. I think the statement will be a lot of ifs, buts and maybes.
“It will be a bit of a non-event,” Montlake concludes.
Some are more optimistic, though. TMA director of mortgages David Copland opines: “In his autumn Budget, the chancellor made true on his promise to better support the property market, particularly first-time buyers, through the extension of the HTB scheme until 2023 and a stamp duty exemption on shared ownership properties.
“However, more still needs to be done for ‘could-be buyers’ and these initiatives will require some out of the box thinking.
“The chancellor’s shift away from the buy-to-let market was also a relief for many landlords last October. However, this sector continues to feel like an uphill battle following previous stamp duty enforcements.
“Whilst I expect Hammond’s forecast to be a relatively low-key affair, it may well provide some guidance on where the property market is heading, paving the way for more innovative thinking later this year.”
Chestertons manging director Guy Gittens reports that he does not expect housing to be at the top of the priority list, but does put forth a number of issues he wishes to see address: “The chancellor needs to reduce the stamp duty rates on the purchase of a main home to help to encourage more activity in the market.”
He points to the fact that revenue from stamp duty in 2018 was down 10 per cent on 2017, “while transaction numbers were only 5.5 per cent lower.”
“After Brexit, assuming we do leave the EU,” he continues, “the country will need to work even harder to encourage foreign investment. With this in mind, the chancellor should also drop the proposed stamp duty surcharge on the purchase of residential property by non-residents which is currently being consulted upon by the government. This would send a positive message to foreign investors at a critical time for the UK.”
Source: Mortgage Strategy