All the talk this week is around the hints given that our Chancellor Rishi Sunak may well be about to announce changes to Stamp Duty.
He will be speaking in a “mini-budget” on Wednesday so we will know more then, but we all want to try to avoid the Chancellor saying he will or even may do this in the Autumn budget and not action it before then.
I know many professional bodies and commentators are urging him not to delay this and cause a vacuum as people get tempted to do nothing before the changes take place. This would be wrong on many levels.
At present we do not know if it will be just for FTB’s or for all buyers up to £300k or £500k, or if he will also tinker with the higher rates on more expensive properties. As to whether or not he will do anything on second or investment properties is also one of conjecture, though probably unlikely at this point.
The big question going through many potential purchasers’ heads is whether to wait and see, however, it may well pay to carry on regardless and agree to purchase now before the changes are announced. What we do know from previous occasions is that changes like this tend to lead to more demand and higher prices! Exchange and completion can always be delayed accordingly if needed.
If he does announce an immediate change this will be another welcome tonic to the housing market which has shown just how important it is to the health of the economy in general.
Meanwhile, mortgage lenders are starting to come under some scrutiny for some of their policies in the current environment, especially around self-employed people being declined who have taken the Government “Bounce Back” loan or even the grant. There are also more than expected issues for those who have taken advantage of the Mortgage Payment Deferral Scheme, (I refuse to call it a holiday because it isn’t!).
Whilst lenders are clear that it should not affect a person’s credit score, it nonetheless is starting to form part of their underwriting decision-making process. It is essential that any self-employed applicants seek the advice of a professional broker now to make sure that the right lender is approached to avoid issues further down the line.
That said, there is plenty of good news out there and lenders are at least starting to increase their capacity once more, offer more choice and speed. Interest rates remain low and with the Bank of England reportedly asking lenders to think about how negative interest rates would impact them, they look set to stay at this level for a long time to come.
In terms of mortgage rates, for standard residential mortgages, borrowers can obtain 2-year fixes at 1.09%, (3.90% APRC) and 5-year fixes from 1.39%, (2.80% APRC) whilst variable tracker rates are around from 1.24%, (3.90% APRC).
Those looking at Buy-To-Let can now obtain products from 1.19%, (4.55% APRC) for 2-year fixed or 5-year fixes are available from 1.62% (3.77% APRC).