IMLA calls for govt’s support for housing market ahead of Budget

The Intermediary Mortgage Lenders Association (IMLA) is calling on the Chancellor to take action in several key areas to ensure the housing market continues to help the UK’s economic recovery from the coronavirus pandemic.

Reports emerged yesterday that Rishi Sunak will use his Budget next week to announce a three month extension to the stamp duty holiday beyond 31 March.

IMLA had backed the recent calls for an extension as well as a flexible wind-down to the scheme to avoid a “cliff-edge” deadline simply being postponed to the end of June.

The Association is also now urging the Chancellor to include further support for victims of unsafe cladding, as well as help to boost engagement with green housing initiatives, and improvements to the waiting periods for borrowers wishing to apply for loans under the Support for Mortgage Interest Scheme.

IMLA executive director, Kate Davies, noted the current stamp duty deadline of 31 March has created “unprecedented levels of activity” and put a “huge strain on lenders and conveyancers”, as they race to complete transactions in time.

“We have asked for some flexibility to avoid penalising those who miss the deadline, very possibly through no fault of their own,” Davies said.

“Whilst an extension may be welcomed by some purchasers, unless the flexibility we’ve argued for is built in it will simply kick the can down the road and create another ‘cliff-edge’ in the summer.”

Davies also highlighted the recent cladding crisis as another area for Sunak to address in his Budget next week, suggesting the misery “has gone on long enough already”.

IMLA welcomed the government’s latest announcement – of a further £3.5bn to fund remedial work, taking the total available to £5bn – but suggested this still doesn’t go far enough. The Association estimated the total cost of removing dangerous cladding and repairing buildings is likely to be nearer £15bn – three times the amount the government is currently committing.

“To put the government’s £5bn cladding remediation scheme into context, lenders were collectively required to pay out over £55bn in compensation for mis-sold PPI, which caused no loss of life or livelihoods,” said Davies.

“The inspections rendered necessary by the cladding scandal have revealed myriad cases of poor workmanship and incomplete inspections at the construction stage which, though not as potentially lethal as the combustible cladding, will require costly remediation. It’s completely unacceptable to expect leaseholders to bear these costs.”

Davies has also called for further action on climate change initiatives as well as a review of the Support for Mortgage Interest scheme.

“Climate change is a huge issue and lenders support the government’s ambition to build back better and focus on green initiatives,” she added.

“The Green Homes Grant was well-intentioned, as was a recent BEIS consultation on improving home energy efficiency, but we think this challenge requires a much wider and more ambitious cross-government strategy, rather than a piecemeal departmental approach.

“We would also like to see a rethink on the rules surrounding the availability of the Support for Mortgage Interest loans. This used to be a benefit, but is now a loan, eligibility for which is tied up with Universal Credit benefit payments.

“It seems likely that a number of borrowers – who may not need to apply for Universal Credit – may temporarily lose all or part of their income as a result of the pandemic and could benefit from being able to access the SMI loan – which they will in due course repay, with interest. This could provide a lifeline to those in financial difficulty and keep more families in their homes.”

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