This year’s Queen’s Speech contained a number of important points relating to homeowners and buyers in the UK, with upcoming legislation potentially having a significant effect on those switching mortgages or utilities in the coming months.
Arguably the most important aspect of the speech was the news that a new mortgage switching service may come into force that will enable families to swap their mortgage in the space of just one week.
The government says it is keen to give consumers the widest possible choice when it comes to switching essential services, which will take the advantage away from providers and instead imbue consumers with the power to make the best choice based on their circumstances.
Better Markets Bill
The Better Markets Bill will apply across the provision of several major services, including telecoms, energy and financial services, and by rolling out the new changes it is hoped that competition will also increase, which should result in consumers getting a better deal.
Business secretary Sajid Javid said that a key barrier for many families is the time it takes to switch services, which can depend on the type of utility or product that is being swapped.
In order to make switching quicker and more consistent across all markets, the government has already imposed seven-day time limits for services such as current accounts and mobile phone contracts, and will now explore whether a similar approach to mortgages could be successful.
A joint statement by the Department for Business, Innovation and Skills and the Department for Culture, Media and Sport said the new call for evidence is aimed at understanding the specifics of switching across different sectors, including which processes are in place to ensure a secure and reliable switch.
This will also extend to how quickly the switch can take place, and what forms of redress would be appropriate to compensate consumers if a switch goes wrong.
The government believes that, rather than imposing caps on providers, the best way to bring about lower prices for consumers is by encouraging competition that will result in families simply taking their custom elsewhere if they disagree with a tariff or price point.
Lifetime Savings Bill
Other good news for homeowners was announced in the form of the new Lifetime Savings Bill, which will include the Lifetime ISA - or LISA - offering workers under the age of 40 a 25 per cent bonus on all new savings, up to a maximum of £1,000, from April 2017.
The Help to Save scheme will also entitle workers on Universal Credit or other tax credits to £1 for every £2 they save, up to a maximum of £300 a year, and be introduced before 2018.
Pensions will also be affected through the new Pensions Bill, which will better protect anyone who saves into a workplace pension thanks to stricter supervision of the trusts overseeing them.
This was accompanied by the news that anyone looking to cash in their pension will see a cap put on early-exit fees, while the launch of a new pensions guidance service is designed to help consumers make more informed decisions about their finances and future.
The final key item of proposed legislation was greater visibility of the broadband market, particularly in terms of speeds and continuity of service in certain areas.
With internet now viewed as an essential utility by many, the government says providers need to ensure delivery is as consistent for broadband as it is for vital services such as gas, electricity and water.
This will mean providers being accountable for outages and forced to compensate customers automatically for service failures.
Broadband speeds for individual properties may also be made public, so that house buyers can check the potential connections before moving to an area - something that is particularly important for those who work from home and whose livelihood is linked to broadband performance.
It is thought that the rollout of new legislation would have a similar impact to the introduction of the current accounts switching service, which has seen a marked rise in the number of consumers moving from one financial product to another due to the increased ease of use; a tactic that could have a similar impact when applied to mortgages and other products that directly impact homeowners and buyers.