Explore Mortgage Strategy’s latest top 10 stories this week, delving into the aftermath of the Spring Budget. Discover insights on the abolishment of stamp duty and holiday let tax breaks, along with details on the Chancellor’s proposed £300m holiday let tax raid. Learn more here:
Spring Budget: Stamp duty and holiday let tax breaks abolished
In the Spring Budget, the Chancellor announced the abolition of stamp duty relief and holiday let tax breaks. Jeremy Hunt informed MPs that the relief for individuals purchasing multiple properties would be scrapped, citing its frequent abuse and lack of evidence in promoting investment in the private rented sector.
Spring Budget: Chancellor plots £300m holiday let tax raid
In the Spring Budget, the Chancellor planned to scrap £300m in tax breaks for holiday let owners to fund a 2p income tax cut. Jeremy Hunt targeted various tax advantages enjoyed by these property investors to finance the reduction, as reported by the Sunday Times.
Nationwide agrees £2.9bn buyout terms for Virgin Money
Nationwide Building Society has reached a £2.9bn cash deal to acquire Virgin Money, positioning the merged entity as the UK’s second-largest provider of mortgages and savings. The move aims to expedite Nationwide’s strategy, diversify its products and services, and enhance value for customers and members. The buyout, endorsed by both boards, merges Virgin Money’s £57.1bn mortgage portfolio with Nationwide’s £197.9bn home loan book as of April last year.
FTBs now need 72-year mortgages to hit 2022 affordability: UK Finance
According to data from UK Finance, first-time buyers would now need to stretch their mortgage terms to 72 years to afford the same loans that were available just two years ago. In 2022, when the mortgage market experienced relative stability, the average mortgage term for first-time buyers was 30 years.
Market Watch: Please, consult the industry
In his recent Market Watch, Andrew Montlake delved into the challenges brokers confront amid rate fluctuations and increasing swap rates. With speculation swirling around the Budget’s housing emphasis, he stressed the necessity of effective government policies. Montlake also explored innovative schemes like Own New and updates from lenders, showcasing the industry’s resilience in uncertain times.
Spring Budget: Capital gains cut will not free up house sales, says industry
The Chancellor announced a reduction in the higher rate of capital gains tax on residential property from 28% to 24%. While the Treasury expects this move to boost government revenue and increase availability of properties for first-time buyers, many property professionals question its anticipated impact on house sales.
Budget must address first-time buyer issue: Rightmove
Rightmove’s mortgage expert, Matt Smith, emphasised the pressing need for government support for first-time buyers in the recent Spring Budget. Despite some stability in the mortgage market, Smith noted that demand for typical first-time buyer homes had been slow to recover. He highlighted fluctuations in mortgage rates and near-record property prices as key challenges facing first-time buyers.
Blog: Large lenders must rethink PT proc fees
James Lindon-Travers, managing director of Lindon-Travers Associates Ltd, calls for fairer product transfer (PT) procuration fees from large lenders. Despite brokers’ crucial role in the mortgage market, they often receive only a 0.2% fee, which is inadequate considering the workload. Lindon-Travers highlights the mental health impact on brokers and urges lenders to reconsider their approach to compensation to sustain the broker community.
Stamp duty reduction would be ‘growth-friendly tax cut’ in Budget: IFS
The Institute for Fiscal Studies urged the Chancellor to prioritise stamp duty cuts in the Spring Budget, citing them as more effective for stimulating growth compared to other tax reductions. Deputy Director Carl Emmerson emphasised the importance of targeting stamp duties on property and shares for a growth-friendly approach to tax cuts.
Legal & General lifetime mortgages business dives 53% to £299m
Legal & General’s lifetime mortgage advances, including retirement interest-only home loans, fell by 53% to £299m compared to last year, attributed to decreased demand amid higher interest rates. Despite this, the company emphasised its disciplined approach to pricing and underwriting in its full-year statement. Additionally, Legal & General outperformed the wider equity release market, which saw lending decline by 62% to £2.1bn last year, according to Key’s Equity Release Market Monitor 2023.
