Budget: A missed opportunity says AMI
Robert Sinclair, director of AMI, said: “The increase in the stamp duty land tax exemption to £250,000 is welcome support for the mortgage and housing market. However, limiting this to first time buyers will severely restrict the benefits this might have brought to activity in areas particularly away from London.
“By introducing a new level of the tax at £1million we continue to have an unfair slab tax that will cause a £10,000 jump in the tax for a £1 increase in the price of the property. This smacked of political opportunism. With the increase from 1 to 3% at the £250k figure as well, this is a significant cost to be borne and added to loans. This remains a badly constructed tax, sorely in need of proper reform.
“The offer from the lender community to pay for the extension of the HMRC Income Verification scheme raises the question of why it was truncated in January this year, having been operating since 2007. As an effective fraud prevention tool it clearly had been productive for all parties. We look forward to working with the lending community to ensure that intermediaries can benefit from this initiative in ensuring that applicants are able to afford appropriate mortgages. We must also ensure that self-employed borrowers are not adversely affected.
“The government assurances on lending appear attractive at a headline level. However, it should be noted that these organisations are indicating that they will be providing less gross mortgage lending this year than last. We are dependent on other lenders and emerging firms to provide market growth.
“The announcement that regulation of second charge lending will move to the Financial Services Authority is a welcome development. In time this will simplify advice for the consumer and encourage a more holistic approach from intermediary firms.”