The Chancellor will deliver the Budget in the House of Commons next Wednesday.
Brokers have urged Hunt to look closely at the housing market in his speech, with suggestions that measures like amending stamp duty, launching support for first-time buyers and ratcheting up housebuilding would all improve the state of the market.
Give downsizers a helping hand
Rhys Schofield, managing director of Peak Mortgages and Protection, suggested there was a need for a stamp duty holiday aimed at people downsizing. He cautioned there is now a “ticking timebomb” of people coming to the end of their fixed rate deals, who may need to sell if they cannot cover the higher remortgage costs.
Schofield added: “Making it easier for people to actually move, whilst being careful not to overly inflate house prices by making the holiday only apply to people buying a cheaper property, would be really clever. Plus because it would boost overall transaction volumes it might even net the chancellor more money in overall stamp duty than it costs.”
This was echoed by Kylie-Ann Gatecliffe, director of KAG Financial, who agreed that reduced or waived stamp duty for those looking to downsize “could help ease some of the pressure they are currently experiencing”.
Stamp duty needs to be looked at, agreed Gary Boakes, director at Verve Financial.
“Freezing stamp duty will always boost the property market. With so many people sitting on the fence at the moment waiting or wishing for rates to drop this would be the incentive they would need to get looking again,” he concluded.
However, Riz Malik, director of R3 Mortgages, said he was unconvinced a stamp duty incentive “is going to cut it this time” due to the changes in interest rates on mortgages.
Cutting business taxes
Samuel Mather-Holgate, independent financial adviser at Mather and Murray Financial, said the government should put the “increased fiscal headroom” at its disposal to implement business tax cuts.
He suggested that reducing employer National Insurance contributions, or dropping VAT, would make a difference but admitted he wasn’t expecting such moves.
“Dare we consider, Truss might have been onto something when talking about an anti-growth coalition,” he concluded.
Building more homes
Right to Buy should be scrapped by the Chancellor, argued Graham Cox, director at Self Employed Mortgage Hub, alongside greater support for local authorities to ramp up the production of social housing.
He continued: “With small landlords selling up in droves, homelessness will increase dramatically if no action is taken. Both renting and buying property will simply become unaffordable for many. More housing stock would reduce rents and house prices alike.”
Aaron Strutt, product and communications at Trinity Financial, argued it would be useful for the Chancellor to give some indication around what he thinks will happen with interest rates, given the worries of borrowers up and down the housing ladder.
He continued: “There is still a shortage of affordable homes and rental properties in many areas, and a proper plan to address this issue is long overdue.”
A helping hand getting onto the ladder
Gatecliffe pointed to the difficulties facing would-be first-time buyers, and argued the government could step in and make a difference.
“Many first time buyers are now facing rental increases which means they are struggling to save towards that deposit that they have been working towards – with Help to Buy gone, I feel there is space for another first time buying scheme to incentivize the beginning of the ladder,” she added.
