The Office for Budget Responsibility (OBR) has called today’s Budget the ‘largest sustained fiscal loosening’ since Norman Lamont was Chancellor in 1992, but mortgage experts have criticised the lack of relief for first-time buyers.

Rishi Sunak indicated that by the end of this parliament, day-to-day spending on public services per year would be £100bn higher than it is now, and the OBR said that in medium terms, it took real day-to-day spending per person back to pre-austerity levels.

Borrowing this year is forecast to be £47.4bn – £0.2bn lower than the OBR’s restated March 2019 forecast – and underlying receipts are forecast to be £4.9bn higher, driven by a combination of stronger National Insurance contributions, capital gains tax and onshore corporation tax receipts.

The OBR indicated the strength in receipts will be offset by higher spending, which is forecast to be £5.3bn higher, and is largely due to an increase in local and public corporations’ capital expenditure, an increase in company tax credits and lower than expected underspends by government departments.

However, with the Help to Buy equity loan scheme ending in 2023 and no replacement initiative in place, experts from the mortgage market have suggested ‘more needs to be done’ to help first-time buyers onto the property ladder, and that today's Budget has not announced a replacement scheme for this community.

“Disappointingly, today’s Budget does not bring new hope to first-time buyers,” TMA director of mortgage services, David Copland, commented. “Whilst today’s Budget tackled current wider economic challenges, it’s key that the government prioritises bringing in measures to support this community over the next 12 months.

“The Chancellor’s lack of plans to eradicate stamp duty tax for first-time buyers will be met by many with dismay. This tax is punitive for many would-be buyers, adding thousands of pounds onto the upfront cost of a home purchase.

“In the coming months, I hope to see an extensive government review of the current stamp duty rules for first-time buyers - and potentially even downsizers. This should help restore market activity, freeing up much needed housing stock, and helping more borrowers take their first steps on the housing ladder, without facing a wave of extra costs.”

Bluestone Mortgages managing director, Steve Seal, added: “With the average age of first-time buyers rising, it follows that new borrowers are taking a longer-term view when it comes to homeownership, purchasing larger properties that they can grow into – properties originally built with second-steppers in mind. New housing stock across the UK needs to reflect this shift – with a greater emphasis placed on constructing much sought-after larger units for growing families.

“According to recent research by Zoopla, two-thirds of buyers taking their first steps on the property ladder are favouring three-bedroom homes over one or two-bedroom flats. For borrowers who have experienced a change in financial circumstance during the course of their initial mortgage term, the hurdles only get higher.

“Over the coming months, it will be ever more important for these types of borrowers to seek advice and get access to the affordable, and often specialist, lending solutions they need.”

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