Mortgage experts believe extending cash Isa limits in this month’s Budget could help prospective borrowers and possibly pave the way for a second Funding for Lending scheme.
They say changes to Government mortgage support schemes such as NewBuy, FLS and FirstBuy are unlikely as the various schemes were only launched in March, August and September respectively. They also rule out another stamp duty holiday, despite calls from shadow chancellor Ed Balls in October for a two-year stamp duty holiday on houses sold for up to £250,000.
Hometrack risk and economics director Gary Styles argues setting the contribution limit for cash Isas at the same level as stocks and shares Isas would be a better way to boost the mortgage market. He says: “The market needs something more innovative than another stamp duty holiday. Shifting the cash Isa limit towards the total Isa limit is a distinct possibility and would offset some of the impact of the FLS, making an FLS 2 more of a possibility. There is a case for helping retail savers increase the take-up of mortgages.”
Nationwide head of mortgage strategy and policy Andrew Baddeley-Chappell says: “The cash Isa limit is £5,640 a year and the equity Isa limit £11,280 so we would like to see an equalisation of the upper limit.”