In the latest Mortgage Solutions poll, only 18% of brokers think the government will succumb to political pressure and keep the tax break in next month’s Budget.
The temporary tax exemption for first-time buyers purchasing homes worth up to £250,000 is due to end on 24 March, after which buyers will have to pay 1% tax on properties bought for £125,000 or more.
Housing experts, including the Council of Mortgage Lenders, the National Association of Estate Agents and Aldermore Residential Mortgages have called on the government to extend the FTB concession.
“I think any data released after the Stamp Duty deadline, will show that there was a spike in the first-time buyer market and hopefully that might send Housing Minister Grant Shapps and the government the message that a tax break can help,” said Jonathan Clark, mortgage partner at Chadney Bulgin.
However, Clark said that with a tax break extension looking unlikely, it will be “business as usual” in the first-time buyer market this year.
He said: “There are some better 90% LTV products around although I don’t see mainstream 95% mortgages becoming available anytime soon. There are also some incentives with developers whereby they help with deposits, but that can actually confuse lenders and they don’t often favour gifted deposits.
“Part of the problem is that consumers still believe they need deposits of around 30 – 40%. The industry needs to get the message out that there are 90% mortgages are available.”
Mutual Nationwide said innovation remains key to help boost the first-time buyer sector.
Martyn Dyson, head of mortgages at Nationwide, said: “We certainly hope to see more innovation for first time buyers. For example, it would be good to see variations on Schemes like Save to Buy, which encourage and reward first time-buyers for saving a deposit, while offering them access to mortgages which don’t require huge deposits.
“Other initiatives, which aim to enable parents to help their children secure a deal either as a guarantor or by offering the lender some other form of security may also become more popular.”
