BoE comment: John Phillips, Just Mortgages & Spicerhaart

The latest Bank of England stats show that net lending for mortgages increased 24% from £3.3bn in February to £4.1bn in March, while the annual growth rate was 3.3%. Approvals for purchase fell by 4.5% to 62,300 while remortgaging increased slightly from £49,289 to 49,713. Commenting on the figures, John Phillips, operations director at Just Mortgages and Spicerhaart says that while Brexit is still having an impact, until stamp duty is abolished, or significantly changed, the mortgage market will continue to struggle. He said: “The mortgage market has been struggling for some time now, with the annual growth rate of mortgage lending remaining at around 3% since 2016. Brexit is clearly still having a huge impact – although it is not in the news so much at the moment and as we move into the warmer months, we may start to see a rise in approvals for purchases, but I think there are bigger issues at play; the main one being stamp duty.

“Last month, the House of Lords Committee on Intergenerational Fairness and Provision recommended changes to stamp duty as it is “seriously distorting the market” and I think a major shakeup could be the answer. Stamp duty makes up such a huge proportion of the cost of moving that many of those who want to upsize are choosing to extend instead, while those who want to downsize are staying put in what is often an unsuitable sized home “The stamp duty freeze for first-time buyers has had a hugely positive impact for that end of the market with first-time buyer mortgage approvals huger than ever. But in order to help the whole market, something needs to be done to help everyone else. Ideally, stamp duty would be abolished altogether, but significant cuts would be a good start.”