Budget 2023: Childcare reform could provide mortgage boost
Chancellor Jeremy Hunt’s first Budget yesterday failed to include any specific measures to boost the housing market, but a mortgage broker claims childcare changes could be positive for transactions.
There was no mention of the Stamp Duty incentives for downsizers and energy efficiency support for landlords that many property professionals had hoped for but one area that may still help the property market is childcare reforms.
Hunt revealed that from April 2024, working parents will be able to access 15 hours of free childcare for children under two, expanding to children from nine months in September 2024 and then rising to 30 hours for under 3s from September 2025.
Adrian Anderson, of mortgage broker Anderson Harris, suggested these changes could make more families mortgageable.
Anderson said:
“Childcare fees of potential borrowers are scrutinised by the banks and have a real impact on the affordability capacity for those seeking mortgages.
“Childcare fees were making some families unmortgageable.
“This expansion of free childcare in 2024 will make unmortgageable families due to childcare costs mortgageable, enabling them to get on the ladder or secure the right property to meet their needs.”
Hunt also revealed in his fiscal update that the UK is no longer expected to enter a technical recession.
This has been seen by some as a boost for the property market and buyer and seller confidence.
Tom Bill, head of UK residential research at Knight Frank, said:
“The Budget has certainly provided more of a boost for the UK housing market than the mini-Budget did.
“The absence of a recession will lift sentiment as buyers and sellers adapt to the new reality of higher mortgage rates.
“However, we expect house prices to fall by 5% this year as buyers recalculate their budgets and more supply comes onto the market.”
Nathan Emerson, chief executive of estate agency trade body Propertymark, said the positive economic outlook in relation to growth, inflation and debt will provide confidence to those looking to buy and sell their homes.
Emerson added:
“Additional funding for Levelling Up regeneration projects will also help to develop communities and places where people want to live.
“However, despite the continued focus on VAT relief for energy saving materials it is disappointing that funding for energy efficiency improvements be-it for homeowners or landlords is not on the UK Government’s agenda and the Budget is a missed opportunity to support people to de-carbonise the housing sector.”
Kindly shared by Estate Agent Today
Main article photo courtesy of Pixabay
