More help for first-time buyers is a top priority for mortgage brokers as they set out their wishlists ahead of the chancellor’s Autumn Statement on 23 November.
Many advisers have also called for Philip Hammond to reverse or reduce the impact of cuts to tax relief on mortgage interest for landlords. However, most remain sceptical over the likelihood of this happening.
A recent survey by the Intermediary Mortgage Lenders Association found that three-quarters of lenders and 52 per cent of brokers did not think Hammond would reverse the buy-to-let tax relief changes announced by his predecessor, George Osborne.
Chadney Bulgin mortgage partner Jonathan Clark says: “I’d like to see some exemptions on stamp duty for first-time buyers in deprived areas.”
First Complete sales operations director Toni Smith also backs a first-time buyer stamp duty incentive. She is calling on Hammond to increase the threshold or exempt first-time buyers from paying stamp duty on house purchases up to a set value.
She says: “The threshold for stamp duty exemption for FTBs would, of course, need to reflect regional differences in property values across the UK. Clearly the market in Hampstead is different from the market in Hull.”
Smith says a combination of the end of the Help to Buy mortgage guarantee scheme, rising inflation and the falling pound is having a negative impact on FTBs.
“The market would benefit from a stimulus at the lower end to give FTBs a leg-up onto the ladder,” she says. “The simplest and most effective way to do that is by reviewing stamp duty for this population.”
“After all, shared ownership buyers with a share of a property worth below £125,000 are already exempt. There is no reason that the same principle cannot be applied to FTBs across the UK, who are unlikely to own a large share of their property.”
But London & Country mortgage specialist David Hollingworth warns that a first-time buyer stamp duty incentive could have unintended consequences. He says: “Stamp duty land tax is always something that comes under the microscope and exemption for first-time buyers is often touted as a useful measure.
“It would certainly offer additional help to those already struggling to pull together the deposit requirements, and would remove another ancillary cost of buying. However, although that would enable more people to buy, we should learn from a previous temporary suspension of stamp duty that it runs the risk of simply creating a spike of activity as the exemption comes to a close.”
Trinity Financial Group product and communications manager Aaron Strutt has another suggestion for the chancellor.
He says: “It would be great to have more of a push on self-build. Many of the biggest banks and building societies do not offer self-build mortgages and providing the lenders with more funding incentives would surely help.”
Turning to the controversial changes to the taxation of landlords, Clark says he supports the higher stamp duty rate but feels some of the planned cuts to tax relief on mortgage interest should be eased.
Anderson Harris director Adrian Anderson also thinks the buy-to-let changes may have been too harsh. He says: “The sector needs time to absorb changes to mortgage interest tax relief, which will start to be implemented from April. Indeed, we hope that there may be some backtracking on these plans as otherwise it is likely to lead to higher rents as landlords look to mitigate the potential loss in income.
“While the extra 3 per cent stamp duty payable on second homes and investment properties is unpopular, it is unlikely to change, even though HMRC has subsequently collected far less stamp duty in areas such as Kensington & Chelsea where there are high-value properties.
“Wealthy foreign investors have been moving their focus away from prime central London to cheaper suburban locations, which is making these even more unaffordable for Londoners and those who work in London.”