The UK housing market is on the brink of a fresh affordability crisis as the removal of stamp duty relief threatens to push thousands of prospective buyers out of the market.
According to Rachel Geddes (main picture), Strategic Lender Relationship Director at Mortgage Advice Bureau, a staggering 41% of buyers now say the changes could prevent them from purchasing a property in the next 12 months.
She warned: “With demand at risk of plummeting, house prices could take a hit, while affordability issues continue to plague first-time buyers.
“Many are being priced out, and unless urgent reforms are made, homeownership will become an increasingly distant dream for aspiring buyers.”
OUTDATED FRAMEWORK
At the heart of the problem lies an outdated lending framework that fails to reflect the realities of modern homeownership.
Despite evolving financial habits and rising costs of living, restrictive stress testing and affordability criteria remain largely unchanged.
Geddes is calling for urgent action, including adjustments to Loan-to-Income (LTI) caps and increased availability of 95%+ Loan-to-Value (LTV) mortgages to help those struggling with deposits.
The Financial Conduct Authority (FCA) recently criticised lenders for being “too cautious” when approving mortgages for first-time buyers, pointing out that existing flexibility in stress testing is being overlooked.
Geddes adds: “This was rightly called out, All eyes are now on lenders to step up, embrace innovation, and make homeownership more accessible.”
