Budget 2007: A Mortgage Expert’s View
March 23rd, 2007
The only thing to have come out of the latest Budget announcement that appears to have had an affect on the mortgage market relates to stamp duty and more ‘eco’ mortgage products.
The exemption of carbon zero homes from stamp duty does not create any excitement, as from the Government’s own figures, there are only 24 carbon zero homes at present.
Any attempt to cut carbon emissions and also promote the development of products that will enable the building of carbon zero properties in the future, must be commended, but its success will depend upon developers and customer demand for this particular property type. It will be important that carbon zero properties are similar in price to more traditional properties; otherwise the stamp duty exemption will be worthless. It is likely that developers will use energy efficiency as a promotion tool to distinguish their products from others.
In this Budget, the chancellor identified the important role that lenders have in introducing ‘green finance’ products to help customers reduce their impact on the environment. A number of lenders have already announced that they will be providing a ‘green’ mortgage in the near future, while others including the Co-Op and Abbey already provide eco-friendly loans. The general thought is that this type of product will have an important role to play in the future.
The fact that the Chancellor has decided not to change any of the stamp duty thresholds will not give any assistance to first time buyers. House prices continue to rise, even if this is at a slower rate than in recent times, and first time buyers play a vital role in the housing market. The majority of first time buyers will be looking at purchasing property in excess of the £125,000 stamp duty threshold.
The Government has said that it wants to encourage first time buyers to get onto the housing ladder, but this budget does not seem to provide any extra incentives for them. There are calls, from a number of areas, for first time buyers to be exempt from stamp duty as a form of encouragement.
Author: Jenny Challenor
March 23rd, 2007
Category: Mortgages.
