IMLA struck by déjà vu after latest Budget promises
The Intermediary Mortgage Lenders Association’s executive director Peter Williams (pictured) is feeling a sense of déjà vu after yesterday’s Autumn Budget.
He said in every Budget new housebuilding pledges are made but supply remains too low, while the first-time buyer stamp duty cut is yet another policy which will ramp up demand.
Williams said: “We note that the 300,000 more homes promise has now slipped out to the mid-2020s and that it is for net additions rather than newly built homes.
“Summing up, an underwhelming sense of déjà vu remains. In every Budget new housebuilding pledges are made, yet supply remains too low and prices unobtainable.
“When it comes to the success of the housing aspects of Hammond’s latest Budget, the devil will be in the detail and in moving forward at speed. The clock is ticking ever louder.”
He joined a number of other commentators in questioning the move to cut stamp duty for first-time buyers on properties worth up to £300,000.
Williams added: “The political resolution to improve prospects for aspiring homeowners that has seen stamp duty abolished for the majority of first-time buyers will be welcomed by many but in practice it may simply inflate house prices even further.
“The reasons for this are twofold; firstly, sellers are likely to take advantage of the buyer’s newfound purchasing power and seek to capture higher prices than they might otherwise achieve.
“Secondly, as we know from previous changes, we will see some price distortion among properties around the £300,000 threshold (£500,000 in London), where demand will be at its highest.
“Ultimately, there is a real risk that we will see a stoking up on the demand side at a time when there is already a severe imbalance in supply.”