Yesterday’s budget contained plenty of potential good news for conveyancers. But what has the industry made of the measures?
Help to Buy Scheme
Chairman of The Conveyancing Association (CA), Eddie Goldsmith was largely positive about the announcements saying: “We welcome the Chancellor’s efforts to help reinvigorate the stagnant housing market through these measures.
“So far, all the Government’s initiatives, whilst offered in the right spirit, have just not had much impact.
“These new proposals which combine more help for new homebuyers, with a significant underwriting of loans, may very well reach those parts which other previous schemes haven’t.”
Not just first time buyers
Adrian Coles, Director-General of the BSA tentatively welcomed the fact that measures were not just focussed on first time buyers. He said: “There will inevitably be questions that need to be addressed, not least the cost of the commercial fee, the impact on borrowers at the 79 per cent threshold and whether all lenders will benefit from an element of capital relief.
"The current rules see lenders having to put more capital aside to support higher loan to value lending which acts as a natural restriction.”
Funding for lending
Mark Blackwell, managing director of xit2, property data specialists, mentioned concerns about the impact of the Funding for Lending scheme.
He said: “Funding for Lending isn’t really sustaining first time buyer activity, and has been poorly targeted.
“Lower monthly payments for the better-off — those with the most equity — will do little to lift a sluggish housing market.”
He made the case for including non-banks in the scheme in order to improve the effectiveness of the scheme.
He added: “However, lenders can be applauded for some of their caution — a return to the recklessness of 2007 would be as much of a failure as a further collapse in lending levels.
“Quality of lending is as important as quantity. Proper property and credit risk management will be vital for a more sustainable model of lending in future.”
The Chancellor pledged that 15,000 new homes would be built. Richard Sexton, director of e.surv chartered surveyors, said this was “just a drop in the ocean”.
He said: “More homes need to be built — and the government needs to do much more to help.
“We need 270,000 new homes a year in England to meet demand, yet in 2012 there were just 105,090 housing starts.“
Mr Sexton said that government needs to encourage local councils to build, and land owners to develop banked land.
Jonathan Moore, managing director of EasyRoommate said the Chancellor has missed a golden opportunity to unlock accommodation sat idle across the country.
He said: “There are approximately 25m empty bedrooms in the UK. If even a fraction of these were opened up to paying tenants it would release some of the pressure building up in the rental sector.
“The rent a room scheme allows homeowners to earn £4,250 per year tax free from letting out accommodation in their home. But this allowance hasn’t been increased for years.
“Extending how much homeowners can earn on rent before being taxed will encourage thousands more landlords into the market, and ease the supply shortage renters are currently suffering.“
What do you think of yesterdays budget? Are you hopeful it will bring positive changes? Or are you skeptical about how much impact measures will have?