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What impact will the Autumn Statement measures have on the mortgage market?

Journalist: Becky Bellamy, Mortgage Strategy and Mortgage Finance Gazette

ended 22. November 2022

  • Were you happy with the outcome of the Autumn Statement on 17 November?
  • What impact do you think the stamp duty cuts will have on the market?
  • How will cuts to capital gains allowance impact the BTL market?
  • Did you expect the Govt to announce a new Help to Buy scheme or replacement?
  • Were there any other areas of the sector you expected to feature in the statement that were absent?
  • Going forward, how will the Autumn Statement measures impact the mortgage market? Do you think the market will react positively/negatively?

5 responses from the Newspage community

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Justin Moy
Managing Director at EHF Mortgages
I don't think we were ever going to be 'Happy' with the autumn statement, I think we were pleased not to see too much tinkering by the chancellor. Maintaining the previously announced Stamp Duty cuts for the next couple of years will give still provide a level of incentive to buyers, offset by the higher mortgage rates. For Buy to Let landlords, I think the reduction in Capital Gains Allowance will be an annoyance more than anything. Those exiting the Buy to Let market due to the mortgage rate increases will feel harshly treated, however, many would have seen significant returns on their property over the last few years. I don't see an immediate need for a replacement Help to Buy scheme, if there needs to be something to fill that void then perhaps a scheme that appeals to both new and previously owned property would be ideal. We have a number of these private equity loan schemes in place, such as Proportunity, so expanding that kind of product would be beneficial. The statement has provided stability to the financial markets, which have then fed both the cost of money and importantly confidence levels. So whilst there was no direct intervention making an impact, a week on from the statement we are seeing plenty of mortgage rates reduced across the market. That is good news.
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Bob Singh
Founder at Chess Mortgages
Were you happy with the outcome of the Autumn Statement on 17 November? No but given the previous disaster it was just enough to steady the ship. It did fall short of exciting the markets What impact do you think the stamp duty cuts will have on the market? Not much except it will focus a few minds to complete their deals in time to make some savings. How will cuts to capital gains allowance impact the BTL market? Not much as the loss of relief isn’t a large sim for most landlords and likely to be less than the estate agents fees ! CGT is only payable on an actual sale where there has been a gain ….not for just thinking about it ! Did you expect the Govt to announce a new Help to Buy scheme or replacement? Yes, that would have infused life into the property market and been a big help to first timers and developers who will start to feel the chilly winds soon Were there any other areas of the sector you expected to feature in the statement that were absent? Planning liberalisation- more homes need to be built to address the balance but with rising costs and supply issues builders may defer projects Going forward, how will the Autumn Statement measures impact the mortgage market? Do you think the market will react positively/negatively? The market will keep moving - tracker rates will dominate the products and whilst expected to rise in the short term should start to fall in 2024
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Jonathan Burridge
Founding Adviser at We Are Money
Were you happy with the outcome of the Autumn Statement on 17 November? It was an unremarkable sensible set of measures, widely expected and evidently well received and it has returned some stability. So a good outcome so far. What impact do you think the stamp duty cuts will have on the market? We rush to these steps and they do not seem necessary. I would think that these will be reviewed if house prices perform as many expect and that could raise some additional central revenue which we need. Watch this space. How will cuts to capital gains allowance impact the BTL market? The private landlord sector is already under pressure from rental coverage calculations, the loss of income tax relief. It shouldnt be seen as bad if landlords exit the market as it may create some liquidity of stock for home buyers. Did you expect the Govt to announce a new Help to Buy scheme or replacement? Yes, I understand conversations are ongoing. But what we need is more home building through planning reforms and other incentives for builders to build more not sustain price growth. Were there any other areas of the sector you expected to feature in the statement that were absent? We need more energy sustainability focus making retro-fitting affordable and not quickly obsolete. It is an enormous task beyond domestic energy savings that reaches deep into our energy infrastructure and, at some point the Government will be forced to subsidise this work. The sooner they start investing the better. Going forward, how will the Autumn Statement measures impact the mortgage market? Do you think the market will react positively/negatively? The headline announcements appear to have served purpose, but, tomorrow is another day.
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Matthew Jackson
Director at Mint FS
The reaction will be positive - the mortgage market did not need or want to be headline news in the Autumn Statement. We needed a competent delivery to return to a semblance of stability in the markets and this is what we got. I would have liked to have seen an extension of help to buy or similar and some more robust support for investors to encourage them to maintain or add to portfolios - however given the constraints on public spending this was unlikely to materialize. Although helpful to first time buyers , the stamp duty cuts alone will not magically allow someone to borrow more or afford monthly mortgage payments which have increased sharply in the last 3 months. I fear that in certain area's of the UK we will see an alarming drop in activity from those looking to buy their first property.
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Oliver Cotterell
Director at Windsor Hill Mortgages and Cotterell & Cotterell Commercial Finance
Overall, with the response of the UK finance market I would say that I am satisfied with the Autumn statement. It appears to be helping provide much needed stability in the economy, and we are continuing to see lenders dropping rates, which is promising in a time when the rates previously had been going in the other direction. I think the stamp duty cuts will help reduce the impact that a lot of investors would be feeling with the impending changes to EPC requirements for rental properties. Will it help be enough to stop UK property values dropping over the next year, I doubt it, but it might reduce the impact a little. The cuts to capital gains allowance will likely impact on investors in one of two main ways. Either they will consider 'offloading' property sooner, which would be adding more properties on a market that already appears to have more properties than buyers, or they would considering holding the property, in the hope that there may be future changes to capital gains tax. To be honest, no we didn't expect the government to announce a new Help To Buy scheme, they have recently introduced the Help To Build scheme, which isn't to dissimilar to the Help To Buy, but for self builds. As a country we are way behind a lot of Europe when it comes to self build homes. There was the hope that there could have been some support with the statement when it comes to reducing rates, particularly for Buy To Let Mortgagers, as landlord have been forced to increase rents to make sure that they can pay for their mortgage. I think the Autumn Statement as a whole covered key parts that had to be addressed, even though we likely find that there will be many challenges ahead. At the moment the response from lenders has been very positive with a large number of lenders reducing rates rather than increasing them.