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Chancellor Sunak under pressure to breathe new life into the striking housing market

Housing Boost: Rishi Sunak is expected to announce six months of vacation with stamps today

Housing Boost: Rishi Sunak is expected to announce six months of vacation with stamps today

The Chancellor of the Treasury is under pressure to breathe new life into the housing market after figures showed prices were worst since 2010. After four months in a row by mortgage lender Halifax, Rishi Sunak was expected to announce measures today to get things moving. again.

Most notable would be a six month stamp duty holiday, exempting buyers from paying the property tax of less than £ 300,000, or even £ 500,000.

Sunak is also expected to offer homeowner vouchers for energy-saving property improvements worth up to £ 5,000. But experts warned that more support is urgently needed to boost the market as fears that a recession on the corona virus will push prices down.

They have warned the chancellor that he is at risk of gobbling up real estate sales – rather than helping them – unless he rules this out or immediately implements the stamp duty cut.

Jeremy Leaf, a London-based broker and former chairman of the Royal Institution of Chartered Surveyors, said there had been a massive “release from pent-up demand” since the housing market reopened in mid-May.

There is now more interest among city dwellers to move to the country, he said, as well as families looking to buy bigger houses. But he said some customers had already put their purchases on hold this week pending a reduction in stamp duties.

‘He [Sunak] just have to do it or make it clear that he absolutely does not, “Leaf said. “Right now we have people who interrupt transactions and say they won’t do anything until they know for sure.”

Proponents of a stamp cut say it will boost the market by giving people who want to increase their purchasing power, and give older people more of an incentive to downsize – giving people further up the ladder a chance to move up the ladder.

Kevin Roberts, director of Legal & General Mortgage Club, said it would also give a big boost to first-time buyers, who could be “the engine driving the housing market forward this year.”

Stuart Adam, an economist at the Institute for Fiscal Studies, said a reduction in taxation would also bring benefits, as more people would move home to increase the number of home improvements and sales of DIY materials.

The Home Builders Federation has called for an extension of Help to Buy, stating that some 18,000 home sales could otherwise be canceled due to homes not being completed on time

The Home Builders Federation has called for an extension of Help to Buy, stating that some 18,000 home sales could otherwise be canceled due to homes not being completed on time

The Home Builders Federation has called for an extension of Help to Buy, stating that some 18,000 home sales could otherwise be canceled due to homes not being completed on time

“These kinds of tax changes can have a very powerful effect and encourage people to make purchases,” he said.

“The downside is that they are sometimes followed by a hangover, which you don’t want when you’re still in recession, so the timing of this is the very difficult judgment the chancellor has to make.”

However, experts say Sunak should expand the Help to Buy scheme and work with other ministers to reform planning rules.

Help to Buy, which provides taxpayer loans to new home buyers, will expire in its current form in April, although in practice the closure will actually be in December due to construction schedules.

The new scheme applies only to new buyers and imposes regional price limits on the amount that can be borrowed.

But experts say Help to Buy is even more important to new buyers now that top lenders like HSBC and Nationwide have temporarily stopped offering mortgages that only require a 5 percent down payment.

Financial Advisory Service Moneyfacts says there is “huge demand” for 5 percent mortgages, but only 22 were available yesterday, many of which were only for certain types of professionals or those who could guarantee.

The industry body, the Home Builders Federation, has called for an extension of Help to Buy, stating that some 18,000 home sales could otherwise be canceled because the homes would not be completed on time.

David O’Leary, the head of the organization, said, “Coronavirus forced the industry to shut down, and although the builders are now back on site, deliveries have inevitably been delayed.”

But Matt Kilcoyne, deputy director of the Adam Smith Institute, says planning reforms are needed that allow for faster conversion from offices to homes, as well as changes to reduce the time it takes for transfer.

This and a reduction in stamp duty would be much more effective than expanding Help to Buy.

Protecting people’s jobs and income is also vital. “If you don’t have a job, you can’t afford your mortgage,” Kilcoyne adds.

Overall, Knight Frank analysts predict house prices will fall by 7 percent this year.

Oliver Knight, head of residential research, said: “We see a fairly benevolent approach to lenders and with an interest rate that will remain low for some time, borrowers will not be under the same pressure as before.

“That, and the swift action the government has taken so far, means the market is somewhat more isolated than before.

A cut in stamp duty will certainly have an impact on affordability and probably the most obvious other way to help is an extension of Help to Buy. ‘

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