View more on these topics

Budget chance to kick-start market

A bruised and battered mortgage market awaits the Budget speech on Wednesday with bated breath. It will be made by the first chancellor to preside over a run on a UK bank since savers lined the streets outside Overend, Gurney & Co in 1866.

When chancellor John Major took over the reins of government from Margaret Thatcher 18 years ago, Norman Lamont succeeded him. The result was Black Wednesday, when the UK pulled out of the European Exchange Rate Mechanism and 15% interest rates caused the mortgage market to grind to a halt.

It’s perhaps fitting then that when Tony Blair was succeeded by Gordon Brown, Alistair Darling in-herited the mess we’re in now.

This time it’s the global liquidity crisis that has the potential to bring the home buying process to a standstill. And while we’re a long way from seeing interest rates hitting 15%, there’s a danger that the first-time buyer and seller markets could collapse.

The squeeze has forced some lenders to pull back from the 95% LTV market. And now those willing to provide 90% LTV-plus deals are few and far between.

First-time buyers are the lifeblood not only of the UK mortgage market but also associated industries – from surveyors, valuers and estate agents to white goods suppliers, plumbers and decorators.

The average first-timer now pays Stamp Duty nearly everywhere in the South, so backing our four-year campaign to Step Up Stamp Duty to a starting threshold of £150,000 would be one small step towards kick-starting the market. Scrapping it for this class of borrower would be even better.

But with a rise in repossessions looming, perhaps Darling also needs to encourage some social responsibility from bigger lenders such as HBOS, Nationwide, Abbey, Lloyds TSB and Royal Bank of Scotland. The right tax break for the right reasons would be welcome news for everyone.

Recommended

Would you use the government’s national money advisory service?

A government-commissioned report last week recommended the creation of a national money advisory service. Yvette Cooper, chief secretary to the Treasury, revealed that around £12m will be spent on launching the scheme, which is designed to help people make better decisions about their finances.So, this week Mortgage Strategy asks…Phil Forshaw, 37, business ownerNo. I run […]

New landlords struggle to access BTL sector

Access to the buy-to-let market has become harder for new landlords as mortgage deals became scarce, says the Royal Institution of Chartered Surveyors.The latest RICS lettings survey of Q4 2007 shows the first fall in new landlord instructions to surveyors to let their properties since the study began in 1998.RICS says the credit crunch has […]

BUDGET 2008: Darling reveals Stamp Duty change

Borrowers on shared equity schemes wont have to pay Stamp Duty until they own 80% of the equity of their home.Chancellor Alistair Darling revealed the change in today’s Budget speech.But still no change to the wider Stamp Duty threshold.

Thumbnail

Health Shield joins the Association of Medical Insurance Intermediaries

Health cash plan provider Health Shield has joined the Association of Medical Insurance Intermediaries (AMII) as a corporate member. The non-profit-making Friendly Society is one of eight health cash plan providers to join the intermediary trade body, which is looking to establish working parties with intermediaries and providers on issues such as product innovation and regulation.

Newsletter

News and expert analysis straight to your inbox

Sign up