IMLA said the Government must provide a clear direction on how it intends to support the supply of mortgage funding, particularly as there is a risk funding will become worse as lenders repay government support schemes and the banking sector takes on regulatory changes.
Peter Williams, executive chairman of IMLA, said: “The Budget hangs heavily over the housing and mortgage market. Whilst we do not expect the Chancellor to address the myriad of housing issues, he needs to recognise that we have a mortgage funding problem which is preventing the housing market from making its full contribution to the critical issue of meeting housing demand.
“We urge the Chancellor to give full recognition to the housing and mortgage funding challenges facing the Government.”
Williams said that spending cuts were only part of the solution to the country’s economic problems and there must be clear action on mortgage funding.
IMLA also called on the Chancellor to consider the impact of any changes to Capital Gains Tax (CGT) on the private rented sector, saying that residential property investment should be treated as an entrepreneurial activity for the purposes of CGT to encourage continued investment.
Williams said: “The Chancellor has to avoid making matters worse for the housing market by unfairly hiking CGT for the investors who are driving the growth of the private rented sector at the very moment when housing choices are quite limited.”
