The news that the Mortgage Interest Relief scheme is to be extended for qualifying loans until 2017 is good for both existing home owners whose relief is due to expire and for new purchasers who will still be able to obtain mortgage interest relief for qualifying loans. The real benefit of this extension will be seen … as and when interest rates start to climb late next year as the relief will climb in line with higher mortgage repayments thus cushioning some of the impact of higher rates.
However this continuation of the relief scheme is unlikely to be enough to encourage first time buyers to purchase in the coming years. In addition buyers might put buying intensions on hold due to the minister reaffirmed a commitment to introducing a property tax at a future point in time but did not specify when that would be. With the property tax potential buyers could be reluctant to purchase and pay stamp duty now given that stamp duty will likely be eradicated or substantially reduced upon introduction of the tax.
Have your say
- Would buyers remain reluctant to purchase and pay stamp duty now given that stamp duty will likely be eradicated or reduced as a property tax is introduced?
- Or would the continuation of the relief scheme be enough to encourage first time buyers to purchase?