Call for review of mortgage affordability criteria by new government

Rightmove says there should be a review of mortgage affordability criteria undertaken by the next government.

The portal’s mortgages expert Matt Smith says: “There’s an opportunity to unlock greater affordability in a responsible way, which could help more first-time buyers get on the ladder. First-time buyers are already taking out longer mortgage terms and lender innovation has included the introduction of longer-term fixed rates that are likely to be part of the solution as they help by ensuring certainty of payments.

“Various mortgage schemes have played their part and supported a number of people, and we know from our study that people would like to see new schemes introduced, but we think longer-term solutions would be more effective than short-term schemes.

“Either way, it’s most likely that regulatory change is needed, so it's critical that the government works with regulators and lenders from day one on any mortgage solutions, to ensure buy-in and take up, which will in turn create more options for first-time buyers.”

The demand is one of many from the portal ahead of next month’s General Election.

The biggest change that home-owners and estate agents would like the next government to introduce is a reform of the stamp duty system. The portal says the barrier that stamp duty presents, especially in higher priced areas, could be preventing thousands of people from moving. If a new stamp duty system took into account regional property prices, or helped encourage more people to downsize, it could help movement in the market.
 
Data from Rightmove shows that in London, only 4% of homes for sale are exempt from the current stamp duty charges for all buyers, compared to 71% in the North East.

Its property expert Tim Bannister says: “At the very least, the next government should make the current changes to first-time buyer stamp duty charges in England permanent, as the higher thresholds introduced in 2022 are due to expire next year. But there’s also a bigger opportunity to reform stamp duty to encourage more movement up and down the property ladder. With such regional variations in property prices, increasing stamp duty thresholds in line with these regional variations would seem a logical first step for stamp duty reform.”
 
Green incentives are also demanded by Rightmove, which claims the focus on helping people make their homes greener has fallen off the government’s agenda in recent years. A proposed deadline for landlords to improve homes up to an EPC rating of C was scrapped, and it’s clear that there is a lack of awareness among home-owners about what changes they should make and why.
 
Rightmove surveys suggests that in 2022, over a third (36%) of landlords said they planned to make improvements to properties rated below a C. In late 2023, after the government had announced they were scrapping targets, this dropped to 26%.

Home-owners: Rightmove’s top five priorities for the next government 

Renters: Rightmove’s top five priorities for the next government