Is no news good news for the property market?
So, where was residential property in the Autumn Statement? On the face of it, nowhere.
No mansion tax - this was largely leaked prior to the statement - and no increase in stamp duty land tax were welcomed by those owning or planning to purchase higher-value properties, while there was just a fleeting mention of the £70bn funding for lending scheme and the plan to build 120,000 new homes.
No real surprises there but sometimes the solution just needs time.
Following the reducing impact of quantitative easing on lending, the FLS is in its early days with the first drawdowns totalling £4.4bn only announced last week. However, as those looking for mortgages today should be able to confirm, the market seems to be competing for business again.
Lower loan-to-value mortgages can now be obtained at under 2 per cent with even five-year fixed rates from under 3 per cent, which reflects a fall of at least 0.5 per cent on rates available prior to the scheme’s launch.
Also, interestingly, last week Nationwide building society reduced many of its products by up to 0.7 per cent, including those available to borrowers looking for 90 per cent.
The key to the economy is to get the banks lending again. Not just to those who have been able to borrow throughout the credit crunch but also to those who would have expected to have been able to borrow: first-time buyers and next-time buyers with lower deposits.
Affordability of borrowing has never been better but the availability needs to improve. Criteria restrictions are still too tight with many borrowers are paying a higher rent than lenders believe they can afford as a mortgage payment. Until this area is approached head on, the door to homeownership for many remains locked.
Maybe FLS is the key to an improved housing market and maybe the chancellor has decided to await the outcome. Sometimes, just sometimes, no news is good news.
Steve Smith is a mortgage consultant at Springtide Capital.