The Intermediate Mortgage Lenders Association (IMLA) criticized the government for extending the stamp duty holiday and questioned the effectiveness of its mortgage guarantee program.

In response to Chancellor Rishi Sunak’s budget presented yesterday, the professional body noted the the extension of the stamp duty holiday did not take a more nuanced approach and therefore, the industry should continue to manage the expectations of buyers.

“The IMLA specifically requested additional flexibility on the program deadline to avoid harming those who risked missing out, while avoiding a simple extension of the program that would only postpone the inevitable impact of the cliff.” , said Kate Davies, Executive Director. from IMLA.

“This has not been included – so it will remain important for real estate agents, intermediaries, lenders and transport agents to continue to manage consumer expectations in light of what could continue to be a very busy time. by the end of June.

“Over the weeks, those who have not yet started the home buying process will be less and less likely to complete their purchase before this first deadline. We could also see prices increase as activity remains strong, ”she added.

The predecessor had a low turnout

Davies was also more circumspect about the 95% Loan to Value (LTV) Mortgage Guarantee System, noting that it would help some lenders come back, but questioned its effectiveness.

The program is designed to only be available until December 2022 and has only £ 3.9bn of collateral available.

It has already attracted commitments from at least six major lenders and was well received by brokers.

“We’ll have to digest the details – and assess how this program differs from its predecessor, which drew a relatively low turnout, with buyers only having access to £ 2.3bn of the £ 12bn sterling of guarantees offered, “she continued.

“Some lenders would prefer a simpler high LTV loan model, which could be activated through a review of the current loan to income and stress test requirements.”

The trade body stressed that more needs to be done to support the environmental impact of the housing sector.

“Interestingly, the Chancellor’s announcement was silent on specific plans to improve the energy efficiency of UK housing stock.

“Green bonds cannot go any further, and more incentives will be needed to help homeowners overcome existing barriers to improving their homes, such as the high cost of efficient repairs and the fact that periods reimbursement rates may be unrealistic, ”Davies concluded.

Owain Thomas is Editor-in-Chief and Contributor of Mortgage Solutions and Editor-in-Chief of Specialist Lending Solutions. He also has experience in the areas of protection, pensions, benefits and human resources. Owain won two Headline Money Awards and the Protection Review Journalist of the Year award.

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