Catch up on Mortgage Strategy’s most popular stories this week. Nationwide demands independent review of FTB market and Chancellor unlocks housing benefit rent freeze. Read more below:
Nationwide demands independent review of FTB market
Nationwide calls for enhanced government support for first-time buyers before the Autumn Statement, citing rising costs delaying home ownership. Proposed measures include an independent review to address income-house price gaps, housing supply issues, planning reforms, and mortgage lending regulations, aiming to create a sustainable plan for aspiring homeowners.
Speculation rising about stamp duty changes in Autumn Statement
There was growing speculation that Chancellor Jeremy Hunt would include changes to stamp duty in his Autumn Statement delivered on November 22. Housing was a key issue for the government, as evidenced by the inclusion of the Leasehold and Freehold Bill in the recent King’s Speech. Although the Chancellor’s capacity for tax giveaways was limited, targeted stamp duty reforms were seen as a potential stimulus for activity in a sluggish property market and support for house prices. This was considered appealing to voters ahead of a general election within the next 14 months.
Chancellor unlocks housing benefit rent freeze
The government has announced an increase in housing benefit, matching it with the bottom 30% of market rents for the first time in three years. During the Autumn Statement, Chancellor Jeremy Hunt informed the House of Commons, stating, “I will raise the local housing allowance rate to the 30th percentile of local market rents. This will provide an average support of £800 to 1.6 million households next year.” The implementation is scheduled for April, incurring a cost of £1.3 billion in the 2024/25 tax year, escalating to £1.7 billion in the 2028/29 fiscal year.
Paul Brett leaves Landbay after seven years
After nearly seven years with Landbay, Paul Brett, Managing Director for Intermediaries, has departed the business. Last week marked the conclusion of his role. Boasting 37 years in the mortgage industry, Brett commenced his career at the now-defunct Hambros Bank in 1986 as an underwriter. Throughout his journey, he held various roles, including founding the Freehold Packaging Association. Brett has now established a coaching and consultancy business within the industry.
Hunt announces plan to speed up planning applications
Chancellor Jeremy Hunt has officially confirmed changes to planning laws, aiming to expedite the processing of planning applications. The announcement was made during today’s (November 22) Autumn Statement in Parliament. Hunt emphasized that these changes are intended to alleviate the planning backlog, providing a boost to both housebuilding and infrastructure projects.
Chancellor scraps Class 2 National Insurance charge
Chancellor Jeremy Hunt announced a significant reform favoring the self-employed, revealing the elimination of the Class Two National Insurance charge. The compulsory flat fee, previously £3.45 per week for self-employed individuals earning over £12,570 (thus qualifying for state pension entitlement), has been abolished. According to the chancellor, this move is expected to save the average self-employed person £192 annually.
Time is right’ for tax cuts, says Sunak ahead of Autumn Statement
Rishi Sunak suggests a timely tax cut, sparking speculation about potential easing of levies impacting the housing market, just two days before the Autumn Statement. The Prime Minister cited the recent drop in inflation to a two-year low of 4.6% in October, down from 6.7% the previous month and halved since the year’s commencement, as the rationale for assessing the nation’s tax burden.
Nationwide cuts resi rates by up to 43bps, launches five-year fix at 4.43%
Nationwide is set to reduce certain residential prices by up to 43 basis points, lowering its lowest five-year fixed-rate loan to 4.43% effective tomorrow (November 23). These reductions apply to various categories, including new business, switcher, additional borrowing, existing customers moving home, and tracker products. Notable changes include five-year fixes for new borrowers at 60% loan to value, featuring a £999 fee, now at 4.43%, below the 4.50% level for a home loan.
One in five home sellers being gazundered
Despite a general decline in gazundering cases within the property market this year, one in five sellers still faces the challenge of their buyer lowering the offer after previously accepting a higher one. These findings come from a recent survey conducted by property purchasing specialist House Buyer Bureau, which analyzed responses from over 1,000 UK home sellers who completed transactions in the last six months. The research highlights the persistence of gazundering practices impacting a significant portion of sellers.
Industry underwhelmed by mortgage guarantee scheme extension
Chancellor Jeremy Hunt has prolonged the mortgage guarantee scheme, extending it for an additional 18 months until the end of June 2025. However, this move has left property professionals largely unimpressed. The government initiative, primarily aiding first-time buyers with 5% deposits to purchase homes, was initially slated to conclude at the end of the current year.
