Caution among mortgage lenders is pushing back against government efforts to boost activity in the housing market – and rightly so.
The UK government has made recent efforts to reignite activity in the property market to boost the economy’s post-pandemic recovery. This makes sense, given that the residential real estate market is a significant driver of investment, productivity and economic growth in Britain. To increase the number of transactions, the government has sought to release pent-up demand by introducing a stamp duty land tax holiday. So far, the temporary relief has been well received. Halifax’s house price index for July recorded a month-on-month and year-on-year increase of above 1%, and commentators attributed this sudden growth after months of stagnation to the stamp duty holiday having come into force early that month. For now, the big question is understanding whether such momentum can be maintained.
