So, we've all had a while to digest the measures announced to aid the ailing house market and those owners who find themselves in difficulties. But were the measures purely short-term vote winners, or could they help us all in the long-term?
By Lucy Searle
4Homes Essentials
Property Search
UK Region Ratings
As you would expect, yesterday's announcements have been met with some cynicism in the press. But, putting that aside, how will they affect you personally?
So, who's going to benefit from a stamp duty holiday? Now that the goverment has finally made a definitive announcement, the whole market should start moving again - until now, anyone sensible has been waiting to find out what would happen with stamp duty before putting their house on the market.
When it comes to individuals, those who benefit from the new measures will be some first time buyers and anyone living far away from the south east of the country. The average house price in the UK is around £178,000, but in the south east - and many other parts of the country - that figure would buy you very little, even if you were a first time buyer.
Who's going to suffer? My guess is anyone who has their house on the market for anywhere around £200,000. It's likely that you'll be asked by just about any buyer savvy enough to drop your house price to under £175,000 so that they can save a couple of thousand pounds - or, they may ask you to foot their stamp duty bill (of around £2K) if they come up to meet your asking price. Which way to jump? It really depends how desperate you are to sell and how many other offers you've had.
These have also had a mixed - although generally positive - response. A spokesperson for RICS says, 'Mortgage rescue schemes are a welcome step to help prevent the trauma of families having their homes repossessed and are likely to be the most effective part of today’s package.'
However, Council of Mortgage Lenders Director General, Michael Coogan, says, 'There are no easy solutions to some of these problems. But we welcome the announcement of reforms to Income Support for Mortgage Interest next spring, where the waiting time for new claims is being cut from 39 weeks to 13 weeks, and the upper ceiling for the size of mortgage that will be met is being raised to £175,000. For borrowers who will be eligible to meet all or most of their mortgage interest payments under ISMI, these reforms will make it much easier for lenders to exercise forbearance until benefit payments begin.'
'The mortgage rescue proposals for some borrowers who would otherwise become homeless, while also welcome, will help only perhaps 6,000 households over two years. Lenders must - and do - see repossession as a last resort. CML members have committed to a range of measures designed to ensure that borrowers who may find themselves in difficulty have good access to advice services that can help them, as well as to alert them in good time to changes in their payments to allow them time to budget or to contact their lender to discuss alternative payment options if necessary.'
Well, it's agreed that more needs to be done to make it easier to get mortgages, but for those who have mortgages and are facing debt or repossession, that figure of 6,000 households is better than none.
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