ROOF Blog

The Government’s stamp-duty holiday on properties sold for less than £175,000 has not helped nearly as many homeowners as first predicted.

Figures obtained by property website zoopla.co.uk show that in the first 12 months of the holiday until 1 September, buyers saved just £173m compared with the £600m predicted by the Government.

A combination of factors lies behind the disparity. First-time buyers – the most likely to benefit from the holiday – have found it hard to get mortgages due to tight lending criteria. Transaction levels have also been lower than normal across the whole market with a shortage of properties to buy.

Borrowers have been warned of soaring mortgage fees after the Financial Services Authority (FSA) called for lenders to assess income and spending in greater detail before approving loans.

Lenders are already under fire for introducing application charges of up to £1,000, which you lose if you back out or the loan offer is withdrawn – a problem not uncommon in today’s mortgage market.

Brokers say that plans by the Financial Services Authority (FSA) to make all borrowers pass an ‘affordability test’ that scrutinises their spending habits mean that fees could go even higher.

Savills Private Finance broker Melanie Bien said: ‘Any step-up in regulation means more cost, and higher costs tend to be passed on to consumers.

‘Lenders are likely to favour higher charges over the alternative option of increasing interest rates as it is a less visible way of raising costs.

‘This will be unhelpful, especially for first-time buyers, for whom every penny counts.’