24 March 2016
The mortgage market has not closed! Phew!
The good news is that, despite the launch of a huge number of new regulations (Mortgage Credit Directive, MCD), in an already heavily policed mortgage market, we are still trading and lenders are still offering mortgages! Phew! Two to three years of preparation has paid off. I am surprised such a huge change in our world was not covered by the national newspapers. But then, the last big change in 2014, called MMR (Mortgage Market Review), didn't get picked up until days before launch and not much coverage there after. Originally, that was to stop the crash of 07/08 happening again. But the new MCD rulings bring us inline with European regulations. Don't get me wrong, there are some worthwhile new rules, but preparing for a constant barrage of new rules over the last three to four years has been a large distraction (and extremely costly) and may have hampered the markets ability to innovate and provide mortgage options and help to customers. Let's hope we will now see an increase in volumes and offerings from the lenders.
Following the budget, not too much to report that we didn't already know. Yes we say goodbye to the Money Advice service, but I can't say that I'm sorry to see it go. There's plenty of impartial and independent advice available across all sectors and the money that will be saved can be used better elsewhere.
The new Stamp Duty Land Tax (SDLT) changes are still set to confuse people. In the main, a 3% additional fee will apply to all second properties or investment properties (Buy to Lets). But the confusion will be around the 'main residence' definition. In the pre budget release of the rulings, if you decided to rent out your current property and purchase a new one, this would have inherited the additional surcharge. However a new list of complex rules have been issued and you need to make sure you understand all the rules around the second property STDL so as not to have a 3% surprise fee to pay at a later date..