Cuts will hit the mortgage market, say brokers By Sarah Davidson


Swingeing cuts to public spending hit every walk of life in october as chancel- lor of the exchequer, george osborne, announced a mas- sive fiscal tightening of £81 billion.


Housing was hit hard with current spending to be cut by 51% over four years and capi- tal spending cut by 74%. new social tenants will no longer qualify for a house for life and will have to pay up to 80% market rate rents. Housing benefit has been capped and single people under 35 will only be able to claim enough to rent a single room rather than a flat. grant Shapps, hous-


ing minister, attempted to soften the blow by announc- ing investment of £6.5bn in housing, with £4.5bn to fund 150,000 new affordable homes over the spending re- view period. But to top it all, 490,000


public servants will lose their jobs over the next four years. So mortgage introducer


asks: What’s the fallout for the mortgage industry?


has been a horrific financial crisis.”


Rob Killeen, director, Capital


Fortune, City of London


“the cuts in public sector jobs will reduce the spending power in the economy and i only hope the scale and tim- ing will prove correct. no-one will ever support cuts but cur- rent spending is unsustain- able.”


Dominik Lipnicki, director, Your Mortgage Decisions, Peterborough


Chris Gardner, director, Obligo,


Southend, Essex


“i think we’re going to find out just how resilient the pri- vate sector is now - trying to find 490,000 people new jobs will be tough. and the majori- ty will more likely than not be mortgaged, which will create more problems for the mort- gage market. i think this will be a seminal moment in what


“the job cuts will be over the next four or five years and a lot of that will be natural wastage as people retire earli- er, take voluntary redundancy and leave naturally. the big- ger impact will be on agency staff and contract workers who’ll run out of work. that will take a lot of cash out of the economy. and i don’t think the private sector can replace half a million jobs.”


Tom Cleary, financial services director, Start Financial Services, Lewisham, London


“on the most basic level i understand the public sector did not create the crisis and it seems unfair that they should have to bear the brunt of the


cuts. But massive expendi- ture by Labour means it will have to. i think the biggest impact will be on consumer confidence and if people start spending less that will impact on recovery.”


Fahim


Antonaides, group director, Mortgage Centre IFA, Mayfair, London


“Half a million people out of work will have to go some- where. most of the private sector is made up of Smes – businesses will need to have the confidence they can take new people on. We need to see some incentive to Smes to make sure the private sec- tor can pick up the slack.”


been worse but there’s a lot of detail to be sifted through still. there is talk of an in- crease in affordable housing but it’s difficult to know how the government plans to do that. i would guess shared equity won’t play a large role which would be a shame, but is perhaps not unexpected.”


Jonathan Cornell,


First Action Finance, West End, London


Danny Lovey, industry pundit, Basildon, Essex


“150,000 new affordable homes being built is a nice try but it’s a pimple on the face of demand for new homes. and while it’s to be welcomed, i can’t see that it’ll have that significant an impact on the market.”


David


Hollingworth, communications director, London & Country, Essex


“the general feeling in the market is that it could have


“these cuts are bad but inevi- table and it will be interesting to see how lenders respond to the news that half a million people in the public sector will be out of a job. Will they get more nervous lending to pub- lic sector workers? they may think it though i would guess they’ll struggle to put any dis- crimination into practice.”


Sally Laker, managing director, Mortgage Intelligence, Bournemouth


“the social housing cuts could lead to huge demand in the private rental sec- tor and there are very few lenders in that sector. i appreciate we need to save now but if the government gave first time buyers an ini- tial tax break, they could pay back in the future, to help them get onto the property ladder and take pressure off the rental sector, that would really help.”


mortgage introducer NOVEMBER 2010 21


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