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Surprises and disappointments: Budget 2013 – a lender’s view

by: Alan Gravett
  • 21/03/2013
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Surprises and disappointments: Budget 2013 – a lender’s view
We were hoping for something in the Budget to stimulate the mortgage market but this is broader than we expected.

On the face of it, it seems like positive news, but only time will tell if it’s what the market needs.

Clearly the biggest news is the announcement of the two Help to Buy schemes the Chancellor is using to help house buyers in an attempt to kick-start the market.

We are pleased that the stimulus will be available for a broader segment of the market than first-time buyers.

We think some of this will particularly help people who bought their home at the peak of the market and would now like to move but are finding it difficult with low levels of equity in the current homes. It sounds like an extension of NewBuy, and is fine if it is easier for all lenders to be involved.

The £3.5bn shared equity element targeting new build homes is a lot more than is available under the current First Buy scheme and we welcome that significant rise.

We have been an active supporter of HomeBuy Direct and First Buy, the government’s previous shared equity schemes. We are pleased that the government has woken up to the need to do something more to stimulate this end of the market.

We are disappointed that the Chancellor did not go even further by reducing Stamp Duty in order to help bring down the costs of buying a home.

Help in other areas such as childcare support and the increase in the income tax threshold will provide welcome help for many, potentially encouraging consumers to make the step to moving home, while capping care costs will mean fewer have to sell their home to pay for care for their loved ones.

Alan Gravett is head of strategy at Teachers Building Society

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