With just hours to go before Chancellor Rachel Reeves’ inaugural Budget, hopes are high across the sector for a bold and supportive approach to addressing housing market challenges.
But will those hopes be dashed? Industry experts share their thoughts.
Mark Michaelides, chief commercial officer at buy-to-let (BTL) lender Molo, said: “Stability from here is the key in settling some of the recent swap rate volatility, which in turn will result in more stable mortgage rates. Stable mortgage rates do not necessarily equate to low mortgage rates, in the sense that we do not expect a return in the near term to pre-Truss Budget mortgage rates.”
Accelerating affordable housing
The Chancellor is expected to announce a £500m boost to deliver thousands of new affordable homes.
Alongside this funding, allowing councils to retain 100% of receipts from council home sales could create a sustainable funding loop, enabling local authorities to reinvest in social housing and community resources.
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Matt Harrison, commercial director at Finova Payment Mortgage Services, says it’s time to deliver on the manifesto promise to build one-and-a-half million homes.
“The government should consider offering incentives to developers, including tax reductions for building affordable housing and simplified planning processes,” he said.
Extending stamp duty relief
Set to end in April 2025, the current relief scheme has been instrumental in facilitating smoother transactions, particularly for first-time buyers and downsizers. If stamp duty relief lapses, some fear it will stymie activity and exacerbate affordability issues.
John Phillips, chief executive of Just Mortgages and Spicerhaart, said: “Extending and making stamp duty relief permanent has to be a priority to support first-timers and downsizers and safeguard the market from another cliff-edge deadline.”
Mortgage brokers are hopeful that maintaining stamp duty relief will keep momentum in the market steady.
First-time buyer support
The industry is hopeful for the return of initiatives like Help to Buy and adjustments to the Lifetime ISA (LISA) rules.
Mortgage brokers believe that these adjustments could be instrumental in making homeownership more attainable for first-time buyers, helping the market.
Nick Hale, CEO of Movera, said: “The Lifetime ISA price cap of £450,000 is unchanged since 2017, and no longer suitable given rising house prices.”
CGT and BTL stability
Many BTL landlords are concerned that potential cuts to capital gains tax (CGT) thresholds or higher rates could push more small landlords out of the market, which will further push up rents that are already being squeezed. This could then push renters out of the market.
Melanie Spencer, sales and growth lead at Target Group, said: “Mixed messages on CGT have already pushed many to dispose of rental properties. If rumours are true that this now won’t be touched, there’s hope we can stem the flow. Otherwise, it does nothing to help with the price of rent and rental supply, nor does it help the affordability of renters looking to buy.”
Equity release
Adam Oldfield, managing director at Phoebus Software, said: “Equity release could potentially benefit from the likely changes to inheritance and CGT. There is a strong feeling that people will start to reconsider their position post-Budget and potentially gift their equity to family to reduce their exposure. Otherwise, families may face paying higher inheritance tax bills on property.”
Streamlining the home buying process
Maria Harris, chair of the Open Property Data Association (OPDA), said: “Right now, home buying feels like a game of musical statues, with everyone pausing, waiting for what the Budget might bring.
“The real challenge lies in our chronically slow and complex home buying process, which stalls transactions and erodes consumer confidence. But there’s a new sense of hope with the recent Data Use and Access Bill announcement – a potential game-changer. This legislation could set us on a path to a faster, simpler home buying journey.”
