The chancellor’s Budget contained some welcome policies aimed at supporting the housing sector.
A review of the Stamp Duty Land Tax holiday's March deadline was clearly needed, as around 100,000 purchases were liable to collapse according to Rightmove.
Not only has the government extended the scheme, but it has also announced a tapering of the tax incentive from June, with the 0 per cent rate continuing on the first £250,000 of a property’s value until September 30, 2021.
Our research found that at its peak, the homebuying journey was taking up to 17 weeks, so today’s decision will support those already in the housing chain moving towards exchange or completion.
The announcement also has the potential to stimulate further demand, providing a short-term confidence boost to both consumers and the wider housing industry.
The coronavirus pandemic has significantly impacted the availability of low-deposit mortgages but industry support for the 95 per cent guarantee scheme, with several mainstream lenders offering these government-backed products from next month, will ultimately increase product choice for low-deposit buyers.
However, while these measures will go some way towards improving access to homeownership, the affordability challenge remains a key barrier for many buyers.
One way to tackle this ongoing issue is by boosting housing supply across the UK, and we welcome further updates from government on how it plans to ensure the steady creation of new homes.
Ultimately, we must avoid a situation where today’s positive measures are counteracted by a significant rise in house prices, making it harder to help ‘generation rent’ become ‘generation buy’.
Kevin Roberts is the director of L&G Mortgage Club
