Mortgage expert outlines what these means for homeowners

With the Spring Budget 2023 announcement today, Uswitch.com mortgage expert Kellie Steed, has explained how this will impact homeowners and the housing market generally.

Kellie Steed, Uswitch.com mortgage expert

“A large focus of Hunt’s first budget has been getting the nation back to work, with a number of plans aimed at making work more accessible to the economically inactive. In the absence of any direct help with higher mortgage costs, this at least provides hope to those struggling due to a lack of income”.

A return to the workplace for early retirees

“The “returnerships” programme will be introduced to offer skills training to the over-50s in an attempt to aid economic growth. Coupled with an increase to the cap on tax-free pension contributions, this offers some promise to those in this age group with rising mortgage and general living expenses.

“Applicants nearing retirement age also have a greater chance of being accepted for a new mortgage and remortgage if they have proof of a stable income. These changes may, therefore, encourage older buyers back to the property market, and ease the burden of maintaining their mortgage repayments post-retirement, by providing an opportunity to increase their pension pot now”.

Help for low-income parents

“A dramatic rise in the cost of childcare in recent years has made it increasingly difficult for families with young children to return to the workforce. Hunt’s response has been to restructure universal credit to provide upfront payments, rather than payments in arrears, and provide an increase to the maximum universal income support threshold.

“Both may go some way to supporting those on the lowest incomes back into employment, giving more young parents scope to begin looking at home ownership”.

Getting disabled people and those on long-term sick back to work

“Plans to scrap the work capability assessment are designed to provide more disabled people the chance to work without losing their benefits. This is promising for those with long term disabilities looking to increase their affordability for a mortgage application. It will also increase their access to mortgage lenders, as people with an income solely consisting of benefits have a harder time getting their application approved”.

Further energy bills support

“Hunt has maintained the current energy cap at £2,500 for an additional three months, rather than raising it to £3,000 on 1st April, as previously expected. From 1st July, prepayment energy charges will also be brought into line with those charged to direct debit customers, reducing bills for many of the lowest income households.

“For those struggling with increased mortgage payments, this may offer an element of balance and reduce the occurrence of missed payments due to a lack of affordability”.

Investment zones offer future promise for struggling landlords

“12 Investment Zones, each to receive £80m in funding over the next five years, have been announced, with eight locations shortlisted in England and four more to be added following discussions with the devolved administrations across Scotland, Wales and Northern Ireland.

“The focus for these areas are high-growth zones, specifically those surrounding universities and research institutions in areas that have traditionally underperformed economically. This will likely provide attractive new buy-to-let investment potential in areas where property prices are more affordable”.