Edwards Grounds Estate Agents mortgage broker comments on Alistair Darling's budget

The budget speech made on the 22nd April 2009 did little to offer up any great stimulus to the housing and mortgage markets although several positive statements on initiatives can be drawn from its content.

The often debated Stamp Duty Land Tax has seen no real further changes although the Chancellor has announced that the nil rate thresholds on properties up to a purchase price of £175,000 brought in last year will remain in place until this year end. Although the continuance of this initiative represents a saving for anybody buying a property of up to £1,750 and will be welcomed by those who benefit between now and the end of 2009, the government have again missed an opportunity to both fundamentally reform what is widely seen as an unfair tax on property and to provide some stimulus to the housing market.

Further initiatives that will provide further limited benefits to the housing market include an additional £500m for the house building sector to be used for the development of new homes of which £100m will be provided to local authorities for the development of eco-homes, and £50m to improve armed forces housing. In addition a further £80m will be directed to the Homebuy Direct shared equity affordable housing initiative. Approval has also been granted for the scheme to guarantee securities backed by mortgages as recommended some time ago by Sir James Crosby. This is aimed at increasing the flow of funds by some £20bn from mortgage lenders to allow them to offer more mortgages to home buyers and movers and to those borrowers who want or need to refinance their existing arrangements.

The government have come in for much criticism in terms of their forecasts on the likely performance of the UK economy as certainly in the last eighteen months they have underestimated the impact of the recession having only in November last year maintained their assumption that the economy would grow in 2009. They have therefore remained overly optimistic and many of their predictions have fallen considerably short of reality. The Chancellor is now forecasting that the economy will contract by 3.5% this year with a return to growth of 1.25% for 2010 and 3.5% in 2011 and this does appear ambitious. This is in marked contrast to several leading economic forecasters including the IFS (Institute of Fiscal Studies) who believe that the economy will contract by nearer 4% this year and only grow marginally in 2010 by 0.3% As far as the housing market is concerned there are modest signs of increased activity with estate agents reporting increases in buyer enquiries and new figures released showing the amount of gross mortgage lending rising some 16% in March against February. Although the numbers are comparatively small compared with 12 months ago they are none the less moving in the right direction and support our own findings that confirm small increases in buyer activity, demand for mortgages and subsequent house sales. If you are in the market to move or buy a home, or simply want to see whether by re-mortgaging you’ll save you money in the longer-term it’s important that you seek professional advice from an independent mortgage broker who can advise on the availability of mortgages for your individual needs and circumstances. You may have to pay an early repayment charge to your existing lender if you remortgage.

Mortgage Advice Bureau is based at Edwards Grounds Estate Agents in Warrington, Woolston, Culcheth, Westbrook, Widnes and also Runcorn. To make a no obligation appointment, call John Pitt on 01925 236221 or mobile 07518 340495. Your home may be repossessed if you do not keep up repayments on your mortgage. A fee of up to 1% of the mortgage amount may be charged depending on individual circumstances. A typical fee is £95.