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‘Fundamental need’ for stability in mortgage market – First Complete

by: Toni Smith, sales and marketing director, First Complete
  • 16/05/2016
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‘Fundamental need’ for stability in mortgage market – First Complete
April's Stamp Duty hike for buy-to-let purchases demonstrated the need for stability in the mortgage market, writes First Complete's Toni Smith.

The end of March saw a flurry of activity as many landlords rushed to buy properties before the new Stamp Duty increase came in.

The whole rationale for the increasing of Stamp Duty was to skew the market in favour of first-time buyers and away from investors. Whatever the long term outcome of this, the short-term rush for buy to let highlights the dangers of messing with market forces. It also puts brokers under a huge amount of pressure as the changes create artificial deadlines and demand that would not have been there without outside interference.

We have anything but natural market conditions at the moment, what with all the various Help to Buy schemes, MCD, buy-to-let Stamp Duty and tax changes to mention but a few.

The problem is not just that we never get to see one scheme play out in full before another is introduced, but that it becomes nigh on impossible for brokers to keep up to date with the implications of all the changes. This in term makes it incredibly difficult for any broker to give ‘best advice’ as what is best advice one week may well have changed a week later.

We have a fundamental need for stability for a period of time. It sometimes takes years for new measures to work their way through the system and unless we wait for a period of time we will never properly understand whether they have been successful or not.  If we do not know the consequences of new legislation, how can any broker provide best advice?

While property prices are rising, little will prevent people from buying property, but will it be the people that the government wants buying?

For the good of society, as well as for the sanity of most mortgage brokers, we need a period of stability now to make clearly visible, what works and what measures are having unintended consequences.

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