Some changes will help property market but how will they affect Chiswick?

Some of the changes will help the property market but how will they affect Chiswick property? The relevant measures include:

• The introduction of a scheme to guarantee mortgage-backed securities
• Maintaining the standard rate of 6.08% at which income support for mortgage interest (ISMI) is being paid for a further six months (to December 2009)
• Extending the criteria for mortgage rescue (the scheme being delivered via local authorities) so that negative equity cases are not automatically precluded
• A new £20 million scheme for local authorities to provide loans to families at risk of homelessness
• Stamp duty holiday extended until the end of 2009 - £175,000 remains the starting threshold (reverting to £125,000 or £150,000 in disadvantaged areas) from 1st January 2010.
• An £80 million extension to the Homebuy Direct scheme
• Extension of ISA allowance from £7,200 to £10,200, providing a modest boost for the outlook for retail savings, and hence funding.

Industry reaction
Council of Mortgage Lenders director general Michael Coogan: “The most important element of this Budget for the mortgage market over the long term may prove to be the new asset backed securities guarantee scheme. This potentially offers an opportunity to restart the capital market funding for mortgages that will be a crucial factor in delivering an adequate supply of mortgage credit.

National Association of Estate Agents
Peter Bolton King, chief executive of the National Association of Estate Agents: “The housing market is the engine of the UK economy and it is likely that this Budget will be remembered as largely ineffectual given the magnitude of the problem. Mr Darling has used a water pistol to try to put out a fire.”

The stamp duty holiday is good news for potential buyers as it was due to end in September this year. Unfortunately, as mortgage lending has been so restrictive, few people have been able to benefit – especially first-time buyer says King. "However this extension gives a bit more time for lending restrictions to ease and hopefully more people will be able to take advantage.

Association of Residential Letting Agents
Ian Potter, operations manager, The Association of Residential Letting Agents blasted the chancellors’ Budget, calling it ‘wholly unsatisfactory’ for having failed to improve rental housing stock for a growing number of tenants.

"Yet again Gordon Brown’s administration has wasted an opportunity to improve the quality of stock of lettings property by failing to incentivise landlords through tax relief on labour and materials” Potter said. "Landlords should be recognised for what they bring not only to the housing market but to the wider economy and treated as any other responsible business."

Association of Mortgage Intermediaries
Robert Sinclair, Director of The Association of Mortgage Intermediaries: "The addition of the Asset-Backed Securities Guarantee Scheme will help inject much needed liquidity into the mortgage market. It should mean the market is better placed to respond to the increased buyer interest we are starting to see. This is a welcome albeit long overdue measure.

April 28, 2009