Stamp Duty Cut – Boost For Mortgage Sector?
It is always helpful to hear the opinions of business leaders of companies involved with the mortgage market, and the Chief Executive of Yorkshire Building Society has spoken with the I newspaper and website. Mike Regnier has said the company has experienced a “strong resurgence” in mortgage applications from first-time buyers since the housing market re-opened.
This is positive news, and when you consider the stamp duty holiday, introduced in early July, there are measures which hopefully support buyers find a suitable mortgage and step on to the property ladder.
The Yorkshire Building Society was one of the first leading organisations to reinstate their 90% loan to value mortgage. The company states they have completed 31,384 mortgages in the first six months of this year and of these, 3,002 have been mortgages for first-time buyers.
Mike Regnier said; “Operationally we’d love to do more, but we just don’t have enough underwriters. We see our role as a mutual as supporting getting customers into homes, particularly first-time buyers.”
The limited ability to offer new mortgages has been caused by a number of things, but clearly the COVID-19 pandemic has played a huge part in this. Not only has the company had to manage their staffing issues during this trying time, the volume of mortgage holiday requests limited what the company could do in terms of new business.
In the first six months of 2020, the Yorkshire Building Society assisted 37,307 existing customers arrange a mortgage payment holiday.
Mr Regnier also spoke about the prospective of a negative bank rate. He said; “I don’t think it’s right and I wouldn’t like to see it. My strong preference would be not to go negative.” He further added that a lot of the society’s customers are reliant on interest for their income and many savers would face a “bleak” outlook if this change was implemented.
With respect to how the mortgage market has been affected by the stamp duty measures, there has been a range of opinions from property experts.
Rightmove commercial director Miles Shipside said: “The uplift in enquiries is likely a mixture of people looking in new areas to see what they can now afford, changing their search criteria to bigger, slightly more expensive homes, and new movers coming into the market because they now have enough extra budget to move home. The savings of £15,000 on property above £500,000 may also help some people to trade up more easily.”
Anything which makes the overall cost of buying a home more affordable is to be commended, and it is easy to see why some households are keen to move sooner rather than later.
While there are new challenges to overcome in the housing market, people shouldn’t consider arranging a mortgage to be an impossible task. However, it is vital people accept help and assistance from professionals in the field. If you are keen to arrange a mortgage, speak to a mortgage broker or experienced adviser and make sure you are fully equipped to make an informed decision.