Lunchtime news Tuesday 2 September 2023

The Government announced its £1 billion housing package this morning. It aims to help first-time buyers get on the housing market with a £300 million shared equity scheme, support vulnerable homeowners at risk of repossession with a £100 million mortgage rescue scheme, and support the housebuilding industry with a £400 million boost for social housing providers to builde more homes. The chancellor has also announced that stamp duty will not apply to purchases of residential property of £175,000 or less for the next year, and the Department for Works and Pensions will reform support for people in difficulty over mortgage interest payments by shortening the waiting period to 13 weeks. Housing minister Caroline Flint said the government was doing everything to promote long-term stability and market fairness, and repeated the call on lenders to exhaust all other measures before resorting to repossession.

New rules from the Council of Mortgage Lenders and Royal Institute of Chartered Surveyors have come into force to stop mortgage lenders becoming the victims of over-inflated property valuations. Developers and builders must now reveal through a disclosure of incentives form – a 12-point questionnaire - if they have offered buyers incentives such as cash back, cars or paid-for legal fees. Lenders have been concerned that the growing use of incentives to encourage buyers has duped them into lending more than the house valuation. This has been especially true of new-built city centre flats in cities such as Manchester, Leeds and Nottingham.

The Bank of England, due to set base interest rates on Thursday, has ruled out an extension of its six-month scheme designed to ease strains in the mortgage market. The special liquidity scheme which was established in April for a six-month period allows lenders to exchange mortgage assets for government guarantees, will close in October.

According to a National Association of Estate Agents’ survey half of all sales in some areas are being gazundered, as buyers at the last minute reduce their offer. In many cases sellers are forced to accept the new offer to avoid having to put their homes back on the market. One in five agents said half their sales were affected by the practise. Critics, including the Conservative Party, claim the research shows that the government’s housing information packs, brought in to take some of these worries out of buying and selling a house, had failed to make any impact.

And finally spare a thought for the Queen whose property portfolio has plummeted in value. Buckingham Palace fell £57 million during the past year to be valued at £935 million, while Windsor Castle fared better dropping by only £8 million to £180 million.