There are clearly several big questions in the UK housing market and I suspect from September we will begin to get some idea of the answers this minority government is planning.
We’re all acutely aware that, while buy-to-let remortgaging remains relatively strong, purchase activity continues to be down considerably.
In this environment it’s no surprise to hear calls for u-turns on changes to mortgage interest tax relief and stamp duty for additional properties.
We can also be firm in our belief that this sort of action is extremely unlikely.
As Charlie Elphicke MP, Conservative MP for Dover & Deal suggests, it’s equally apparent that seeking to increase first-time buyers via targeted hits on buy-to-let and landlords, continues to have its supporters.
MPs like Elphicke want this government to go further.
He clearly wants more support for first-time buyers suggesting that much of the new-build supply in recent years has gone to landlords rather than first-timers.
Without having those statistics to hand – and I suspect Mr Elphicke is going on gut instinct rather than any available data – I’m not so sure I agree with the assertion.
It’s clear that the previous administration’s measures had a sizeable impact on purchases by buy-to-let landlords; in that sense the aim to move private rental sector property into the residential market has, to a very large extent, been successful.
Many might argue too successful, because that fall in purchase numbers combined with anecdotal evidence that landlords are increasingly likely to put parts of their portfolio up for sale, may very well result in a lack of quality rental properties for tenants.
Help not hinder
My belief is that measures to support first-time buyers do not necessarily have to further damage the buy-to-let market.
Support can come in the form of, for example, Stamp Duty holidays or perhaps further incentives to lenders to offer high loan to value (LTV) mortgages – those most needed by first-time buyers.
It has been very noticeable since the end of Help to Buy 2 that lenders are not exactly jumping over themselves to offer high LTV loans, particularly at 95% levels, and so those borrowers with no parental help face saving ever larger deposits to even get on the property starting grid.
The political view perhaps should be that aiding first-timers and damaging buy-to-let do not have to be two sides of the same coin.
The government’s Housing White Paper appeared to show a future route which was much more tenure neutral and I would hope this is the path that can be followed post-summer recess.