The Association of Mortgage Intermediaries (AMI) believes the Budget gives “more than a shot in the arm” to the residential housing market.
The trade body says the for those who have voiced concerns on the lack of housing starts and completions, the new Help to Buy announcements might well be the steroid drug infusion package that many have been calling for. By using government guarantees to underpin higher loan to value lending, this will assist lenders to offer more of this type of product without it impacting on their capital and liquidity positions.
Robert Sinclair (pictured), chief executive of AMI, said” “The new higher loan to value guarantees combined with the proposal to introduce government interest free loans for more than first time buyers must give encouragement to house-builders and to those looking to move up the housing ladder.
“This product which looks like an ‘imitation’ of the Castle Trust product shows a government that has been listening to the market, but may have cut the ground from under that commercial product. The £600,000 house value limit is higher than we would have expected, as it may have been limited to the £500,000 Stamp Duty limit.
“Of course the costs of these initiatives, if effective, will see an increase in activity levels and therefore be more than off-set by the tax take from Stamp Duty. The lack of any tidying of this tax remains as a key priority for the market, but clearly is still needed to fund initiatives such as these.
“On a more parochial level the reduction in employer National Insurance contributions from April 2014, is a massive boost to small firms like AMI.”