Mortgage Industry reaction to Autumn Statement
Right to rule out “Mansion Tax”
The Chancellor decided to not to introduce any new property taxes describing the idea as “intrusive”, incapable of raising sufficient revenue and expensive to revalue homes.
Mark Harris, chief executive of mortgage broker SPF Private Clients, welcomed Osborne’s decision to hold back on any additional property tax schemes.
He said: “The message from the Chancellor seems to be that property is a better investment than a pension. Pension tax reliefs for the wealthy have been substantially cut so once you’ve reached your annual or lifetime pension allowance it therefore makes sense to put any surplus cash into property.”
Harris also approved of the Treasury’s decision not to increase the amount of council tax paid on more expensive properties, leaving council tax frozen again next year, or increase stamp duty on expensive property purchases.
Pledge to build more homes
The Chancellor’s pledge to build more homes was well received by Grenville Turner, chief executive of Countrywide.
He said: “It is widely acknowledged that a healthy housing sector is crucial to the UK economy and working with the housing industry needs to be at the forefront of the government’s agenda.
“We welcome the Chancellor’s pledge to build more houses given the predictions that by the end of 2012 there will be 400,000 more households in the UK than there has been housing built.”
Turner said Countrywide has been calling for some time for more houses at the right price, in the right place so that people can buy at an affordable level in a location they want to live in.
He added: “However the shortage of housing is not the only issue as lack of supply coupled with lending issues is creating a perfect storm. We have been calling for some time now for the government to set out a clear strategy for housing with the aim being to reduce volatility in the housing market.”
Brian Murphy, head of lending at Mortgage Advice Bureau, said: “George Osborne is to be applauded for including affordable housing among the government’s priorities for spending when resources are so tightly constrained.
“The pledge to support the construction of 120,000 new homes, bringing the annual total to 230,000, will go a long way to ease the pressure on the nation’s current housing stock.”
Andrea Rozario, director general of the Equity Release Council, said the absence of a “Mansion Tax” meant homeowners could take full advantage of the wealth tied up in their properties to support themselves in later life.
She said: “Like the Chancellor many are facing difficult decisions to balance their books particularly as they approach and enter retirement. On a personal level releasing equity from their property can offer a valuable alternative to downsizing in order to fund their lifestyles or meet additional costs such as later life care.
“On a larger scale equity release can also ease a significant problem in society by allowing people to stay self-sufficient into their retirement.”
Rozario said equity release gave older generations the chance to help themselves rather than expecting the government to increase borrowing or taxation to support them.
SMEs and Entrepreneurs
Philip George, managing director of Shawbrook Bank, said the UK’s growth would be driven by the army of SMEs and entrepreneurs who had worked incredibly hard to expand their businesses.
He said: “However the banking industry also needs to play its part and better support many thousands of SMEs who are still finding it difficult to get the loans to grow their business. We agree with the Chancellor’s recommendations for a business bank, but for us the detail is still missing.
“We need to know how Shawbrook and other challenger banks can be involved on a level footing with the high street banks.”
George added: “Let’s hope the Chancellor understands the potential of challenger banks like Shawbrook in getting SMEs growing again.”