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Borrowers face testing time

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Only higher-rate taxpayers will feel extra pain from capital gains tax and a rise of 10 per cent is a lot more digestible than an increase to 40 or even 50 per cent.

One item which is impossible to quantify is the impact of the proposed bank levy based on banks’ balance sheets. Anything that discourages banks from lending is going to wreak havoc on the housing market.

It looks like most of us will have lower disposable incomes. This could be an opportunity for banks to turn the screws on affordability and many perfectly mortgageable borrowers may fail their main lender’s affordability models and need help from brokers to access the complex prime market.

Landlords renting property to tenants getting housing benefit may have been nervous about the Chancellor’s restrictions, with a one-bedroom property limited to £280 a week and £400 a week for four bedrooms or over.

Homeowners getting support for mortgage interest have done pretty well as they have been receiving payments based on an interest rate of 6.08 per cent since late 2008 even though interest rates have fallen off a cliff. From October, the support will be paid at the level of the Bank ofEngland’s published average mortgage rate.

Jonathan Cornell is head of communications for First Action Finance

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