Tax hike to take toll on homeloans
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Chancellor Alistair Darling revealed he would be raising the income tax rate above £150,000 from 45 per cent to 50 per cent. Experts say this will affect high-earners' ability to secure finance.
Largemortgageloans.com senior mortgage manager Ian Gray says: "Once lenders factor in the tax increases into their affordability calculators, it is going to make it a lot harder for high-earners to secure mortgages as their income potential will have been seriously impinged.
"Since the start of the credit crunch, lenders have tightened up affordability considerably, so a lot more high-earners will find the computer says no after this tax hike."
John Charcol senior technical manager Ray Boulger says: "It will be interesting to see what lenders do about the affordability calculators over the tax changes."
Stroud & Swindon sales and marketing director Linda Will says affordability will definitely be affected by the tax changes. She says: "Affordability looks at disposable income, so it will reduce what offer comes out from the calculator. But I do not think it will affect mortgage offers dramatically, as it is all dependent on how much more than £150,000 the borrowers earn."
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