Rishi Sunak 'should be applauded' as his actions may lead to better mortgage deals – how?


Halifax released its latest House Price Index today which showed the average house hit a new record high of £254,606, a monthly increase of over 1.1 percent. When compared to March 2020, it was shown house prices grew by 6.5 percent over the last year or so.

Russell Galley, the Managing Director of Halifax, commented on this: “Following a relatively subdued start to the year, the housing market enjoyed something of a resurgence during March, with prices up by just over one percent compared to February

“This rise – the first since November last year – means the average property is now worth £254,606, a new record high.

“A year on from the early days of the first national lockdown, March’s data shows that house prices rose by 6.5 percent annually, or £15,430 in cash terms. Casting our minds back 12 months, few could have predicted quite how well the housing market would ride out the impact of the pandemic so far, let alone post growth of more than £1,000 per month on average.

“The continuation of Government support measures has been key in boosting confidence in the housing market.

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“The extended stamp duty holiday has put another spring in the step of home movers, whilst for those saving hard to buy their first home, the new mortgage guarantee scheme provides an alternative route onto the property ladder.

“Overall we expect elevated levels of activity to be maintained in the coming months, with consumer confidence spurred on by the successful vaccine rollout, and buyer demand still fuelled by a desire for larger properties and more outdoor space, as work-life priorities have shifted during the pandemic.”

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In response to these figures, many noted the Government’s coronavirus themed actions should not be understated, with some pointing out that Rishi Sunak’s efforts should be commended.

Matthew Fleming-Duffy, the founder of the mortgage broker Cherry Mortgage & Finance, touched on this: “The housing market has been absolutely hectic during the first three months of the year, with the stamp duty holiday incentivising people to put their plans into action.

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“As the stamp duty holiday is phased out, there will inevitably be a slowdown in property sales but I still can’t see that resulting in a significant drop in house prices.

“Unemployment may indeed rise but I am confident that the UK workforce will adapt. It is also worth noting that Rishi Sunak has, so far, seen off the doomsayers with his economic creativity, and this should be applauded.

“Only a handful of lenders are currently offering mortgages at 95 percent loan-to-value, but this is likely to change as the Government’s mortgage guarantee scheme results in more lenders offering these products.”

Corey Whelan, a director at the mortgage broker Cambridgeshire Money, reflected on how the pandemic may have pushed people to explore their house buying options: “We’re received a phenomenal amount of enquiries in the first three months of the year.

Rishi Sunak revealed how the Government will be supporting the mortgage and property market in the 2021 Budget, as the Chancellor detailed: “The housing sector supports over half a million jobs.

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The cut in stamp duty I announced last summer has helped hundreds of thousands of people buy a home and supported the economy at a critical time.

“But due to the sheer volume of transactions we’re seeing, many new purchases won’t complete in time for the end of March.

“So I can announce today the £500,000 nil rate band will not end on March 31, it will end on June 30.

“Then, to smooth the transition back to normal, the nil rate band will be £250,000, double its standard level, until the end of September – and we will only return to the usual level of £125,000 from October 1.

“Even with the stamp duty cut, there is still a significant barrier to people getting on the housing ladder – the cost of a deposit. So I’m announcing today a new policy to stand behind homebuyers: a mortgage guarantee.

“Lenders who provide mortgages to home buyers who can only afford a five percent deposit, will benefit from a Government guarantee on those mortgages.

“And I’m pleased to say that several of the country’s largest lenders including Lloyds, NatWest, Santander, Barclays and HSBC will be offering these 95 percent mortgages from next month, and I know more, including Virgin Money will follow shortly after. A policy that gives people who can’t afford a big deposit the chance to buy their own home.

“As the Prime Minister has said, we want to turn Generation Rent into Generation Buy.”





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