Written by: Danny Belton - Head of Lending
Chancellor of the Exchequer, Jeremy Hunt, has revealed the UK’s Spring Budget, giving details about a package of measures aimed at rejuvenating the market and supporting the economy. While the announcements left the housing industry feeling a little lonely, there were some updates worth noting.
Addressing the 99% mortgage rumours
As anticipated, the Chancellor discussed the introduction of a new government-backed mortgage scheme, though this was ultimately axed. 99% mortgages are, for now, not moving forward. Some of the biggest concerns were the potential for an unsustainable rise in house price inflation, increased affordability risks for first time buyers, and the real possibility of negative equity.
With that in mind, it could have been helpful for some first time buyers.
Danny Belton, Head of Lending at Mortgage Advice Bureau, said: “It was looking promising for first time buyers for the budget, but it seems we’re back at square one. 99% mortgages have been dropped by the Chancellor. While saving for a deposit isn’t the only challenge for FTBs, it is still a major blocker, and 99% mortgages would’ve been a good step towards helping thousands of prospective buyers get onto the property ladder.
"Focus now must shift to innovation in the market. Lenders must look at products that focus on rental track records and provide more options for first time buyers. If buyers were hoping that a 99% mortgage was their key to the property market, they shouldn't be deterred. The next step is to speak to a mortgage broker, see what options are available, and get themselves mortgage ready.”
Here are some other options for anyone looking for home incentive schemes and alternative house buying options:
If you're buying a home for the first time, check out our dedicated resource page to get you started.
Change to Stamp Duty relief
Hunt announced in the Spring Budget that there will currently be no changes to Stamp Duty, aside from abolishing stamp duty relief for those buying another property. More needs to be done for Stamp Duty, as it has notoriously been a challenge for buyers of all types.
Additional housing measures
Alongside changes to Stamp Duty, and various other financial updates, the Chancellor also announced that non-domiciled (non-dom) regulation is going to be replaced with something more modern, fair, and simple.
Changes to national insurance
The 2p decrease to NI could be a small but useful boost to affordability for some households, making it potentially easier to save for a deposit, and increasing their monthly income.
For some helpful deposit saving tips, tricks, and advice, click the button below!
Small but mighty? Long-term growth is still on the cards
The full impact of the Spring Budget 2024 announcements will become clearer in the coming months, especially as details are fleshed out and the market changes. Hopefully, these changes are a step forward in addressing some of the bigger challenges facing the housing market, though much more needs to be done in terms of affordability and energy efficiency.
Whether they’re enough to achieve long-term stability and growth will depend on a variety of things, such as how effectively they can put them in place, as well as the wider economic climate.
Stay tuned for more industry news and future updates.
Important information
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