I am of course talking about the annual speculation as to what the Chancellor has hidden away in his Budget briefcase as opposed to punters betting on the Cheltenham Festival, with market commentators keen to pre-empt any new government initiatives or tax changes and the subsequent effect they will have on the economy.
In recent years it hasn’t required a great deal of espionage to uncover the government’s thinking ahead of the Budget statement, with planned leaks to the press all part of the charade these days.
Dropping hints here and there allows the Chancellor to gauge public reaction before any changes are implemented and make the necessary tweaks (or devise desperate plan B solutions) if the backlash is strong enough. Last year’s ‘mansion tax’ is a case in point and the final levy was much changed from what had first been mooted in the media months before.
With the Funding for Lending Scheme (FLS) already up and running, there had seemed little chance of further intervention in the mortgage market in this year’s Budget, but recent comments by David Cameron suggest the government is looking at ways of boosting activity and helping reduce the average age of UK first-time buyers.
It may simply be a case of widening the FLS through inviting non-bank lenders to participate or pumping additional funds into the NewBuy initiative, but it would be heartening to see other options considered.
Much as we all hope home finance takes centre stage on March 20th, house building itself needs to be afforded more thought and resources than it is presently. Consecutive governments have seemed happy to skirt round the issue before passing it on to their successors to deal with, but sooner or later some sort of long-term strategy needs to be determined.
Many of the problems that exist in the mortgage and rental markets are the result of an undersupply of properties, so addressing this root cause would be just as beneficial as attempting to solve the indirect problems that are subsequently created.
So as we all wait for George Osborne’s statement with baited breath, let’s hope that punters gambling on the Gold Cup aren’t the only lucky ones and that the nation’s (potential) mortgage borrowers are also able to revel in some good news this March.
Bob Hunt is chief executive of Paradigm Mortgage Services
