Autumn Statement: Property industry reacts

Chancellor Jeremy Hunt has ended weeks of rumours and delivered his "Autumn Statement for Growth", much to the disappointment of the UK housing industry.

Related topics:  Property,  Housing,  Industry,  Autumn Statement
Property | Reporter
22nd November 2023
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"Landlords needed the Stamp Duty Land Tax surcharge reviewed. They didn't get it."
- Gavin Richardson - Mortgages for Business

With housing once again failing to be on a Chancellor's radar, the property industry was quick to react. Here's what they're saying:

Ben Beadle, Chief Executive of the National Residential Landlords Association, said: “We warmly welcome today’s announcement by the Chancellor, which follows extensive campaigning by the NRLA and others.

“Freezing housing benefit rates were always a disastrous policy, hitting as it did many of the most vulnerable tenants across the private rented sector. Taking steps to reverse this change will provide vital support for tenants who are in receipt of the LHA, making it easier for them to access and sustain rental tenancies. More generally, this will go a long way towards tackling homelessness across the UK.

“All parties now need to commit to ensuring housing benefits are uprated each year so that they continue to be linked to market rents.”

Tim Bannister, Rightmove’s property expert said: “The lack of housing announcements feels like a missed opportunity to help home-movers and home-owners today, given the challenges this year with higher mortgage rates. Affordability-stretched first-time buyers in particular will be feeling forgotten, as they try to get onto the ladder with increasingly squeezed budgets and reduced support options. We hope the government will consider other measures to help the market in the spring budget.”

Gavin Richardson, managing director of buy-to-let broker Mortgages for Business said: "What the housing sector needed was an Autumn Statement that supported landlords. Instead, we're still stuck in landlord limbo.

"Plans to abolish Section 21 ‘no fault’ evictions in the Renters’ Reform Bill are still on hold as we wait for the court system to be reformed. Currently, it takes six months for landlords to regain possession of their property following a legitimate claim.

"Landlords have lost confidence in the courts and are concerned about the security of their investments without Section 21 in place. We want the government to set an eight-week target for processing times for possession claims before abolishing Section 21. The buy-to-let community is still waiting for that.

"We wanted to see Capital Gains Tax relief being made available for landlords when they sell a property to a sitting tenant or first-time buyer — and then invest in a new property to let. That hasn't materialised.

"Landlords needed the Stamp Duty Land Tax surcharge reviewed. They didn't get it.

"And landlords needed Mortgage Interest Relief reviewed. Didn't happen.

"Without these changes, the private rented sector — which could help provide more homes while there is still an insufficient number to meet demand — continues to be damaged by the lack of long-term planning and collaboration.”

Jennie Hancock, West Sussex buying agency, Property Acquisitions said: "It’s a huge shame that The Chancellor did not announce any plans to help boost momentum within the property market.

"Evidence from various data analysts show that transactions have slowed down, and one of the biggest factors is downsizers feeling trapped in their large family homes due to the high cost of moving costs - the majority of which is stamp duty. They are key to unlocking the gridlock across the whole property market, if you release pent-up demand from the top, it will trickle down the housing ladder.

"At our end of the market, clients tend to be downsizing within the same tax threshold - £1.5million+, where the SDLT is a hefty 12% - or the one below, 10%. It is seen as such a huge expense which could be spent on extension or renovation plans instead.

"The Government therefore needed to do something to help get momentum going as by encouraging downsizers to move, it would have had a positive effect on the rest of the market - right down to first-time buyers."

Liam Monaghan, MD at London buying and investment agency, London Central Portfolio said: "Momentum is urgently needed in the property market after a long period of falling transaction volumes across England & Wales as well as limited price growth.

"Our latest LCP Market Review reveals that in the twelve months to August 2023, transactions fell 20.6% in Prime Central London, 28.3% in Greater London and 32% in England & Wales, so we are disappointed to see that the Chancellor has not focused his attention on moving the property market.

"It’s disappointing that a stamp duty incentive was not included in the Autumn Statement. Something along these lines is vital to encourage downsizers to leave their large family homes for smaller ones.

"Currently it is not economically viable for empty nesters to leave their large properties with the Stamp Duty as much as 12% for anything they want to buy over £1.5million, so this type of owner simply holds onto their assets for longer than planned. This limits stock available and with demand far outweighing supply from those looking to upsize into a large family home, it keeps property prices higher for these purchasers.

"This also ripples down the rest of the market, reducing supply for first-time buyers and second steppers too. The Government could have made a real difference here, especially at a time when the market seems to be stagnating, so it’s such as shame that they haven’t.

"It's also a shame that rumours of cutting Inheritance Tax were not confirmed. This would not only have been a wise and popular move for the Conservatives just before a general election, but it would have helped the UK be more competitive on a global platform for overseas investment, helping to boost the general UK economy.

"It would also help build momentum in transaction volumes and price growth for the domestic market. Cutting this tax would have ensured a kick start to the market, as a flat 40% tax for IHT will fuel a continued lack of activity."

Peter Stimson, Head of Product at MPowered Mortgages, comments: “It is disappointing that the Government has decided to extend the Mortgage Guarantee Scheme as we feel it’s not proven to be of any substantial benefit to either borrowers or lenders. In a falling housing market, it is hard to see how this is really of great benefit to borrowers and instead continues to feel like an attempt to prop up an over-inflated housing market which should be allowed to run its natural course.

"Our view is that we should really be encouraging targeted segments, such as FTBs, to save for bigger deposits and to this extent, a reopening and extension, in terms of the amount you could be allowed to save, of the Help to Buy ISA, would have been more beneficial. The Mortgage Guarantee Scheme only helps a very small portion of movers, and poses questions as to whether we should be encouraging FTBs to take out a 95% LTV loan, in a market in which prices are falling?”

Paresh Raja, CEO of Market Financial Solutions, said: “You cannot begrudge the Chancellor’s focus on supporting businesses and consumers with tax reforms, but from the perspective of the property market, it was a somewhat uninspired and unimaginative statement.

“Speeding up the planning process and potentially making it simpler to convert houses into flats will be welcomed by some landlords, investors and developers, but more detail is required. Meanwhile, a more drastic overhaul of the planning system seems to have been abandoned, which feels like an important oversight.

“The lack of meaningful property-related announcements is disappointing, given there had been rumours of stamp duty cuts over the weekend. Today was a real opportunity to breathe life into the market and help catalyse growth at a time when economic markets are gradually improving, but that opportunity was missed.”

Sam Mitchell, CEO of Purplebricks said: "By failing to cut stamp duty and cut it permanently, the Government has missed an opportunity to set the already fragile housing market on a clear path to recovery. Rumours will now grow that we will see a cut in the spring, meaning decisions on buying and selling will be delayed and the economy will suffer.

"This has already been a difficult year for the property sector, and the lack of support will threaten a recovery in 2024. Despite this, the silver lining is the confirmation of the extension to the mortgage guarantee scheme. Not only does this support the green shoots we are already seeing in the lending market, but is great news for first-time buyers, especially if coupled with the declining rates we are seeing in the market.”

Richard Davies, COO of Chestertons, says: “Aspiring homeowners will feel disappointed about the Autumn Statement not including measures to help property buyers. Many would have welcomed cutting Stamp Duty which would have resulted in house hunters, who previously paused their property search, to re-enter the market.”

“A Stamp Duty exemption for downsizers would have also been a crucial step to help those wanting to move to a smaller property. Each year, we meet countless homeowners who are planning to downsize but, due to the Stamp Duty which can be as much as 12%, are put off to do so. A tax exemption would have encouraged downsizing which in turn frees up large, under-occupied family homes.”

“We would have also liked to have seen the Chancellor introduce more initiatives to assist young house hunters get on the property ladder. With the cost of living, many are struggling to save up a sufficient deposit or find a property within their budget.”

“Last but not least, tenants have been facing rising rents and limited availability of suitable properties. To bring much-needed relief to the lettings market, we would have liked to have seen the Chancellor announce tax incentives for buy-to-let landlords with the aim of boosting the number of rental properties. This is particularly needed in London, where the rental market has become increasingly competitive with one single listing attracting numerous tenant applications and viewings.”

Sebastian Murphy, Group Director at JLM Mortgage Network said: “This Autumn Statement presented the Government with an opportunity to really move the dial on housing market activity and to introduce some fresh incentives to get people moving and buying.

"This was an open goal that the Chancellor appears to have missed spectacularly – we have called for a stamp duty holiday for older homeowners who want to downsize but are put off by the large amount of taxation they would need to pay, but nothing of the kind has been proposed.

"Such a measure would encourage older, single people to move into more suitable accommodations while freeing up larger, family homes for those who are moving up the ladder and want these types of properties in order to meet the needs of their families.

"Getting the right people into the right homes would help a large number of people who feel they can’t move at the moment. We need greater levels of supply desperately but a proposal which might allow homes to be split into two flats seems a retrograde measure which doesn’t tackle the types of homes people need or want to buy.

"There has been a lot of expectation about what might be announced today and this feels like a real damp squib for housing and mortgage market stakeholders.”

Jatin Ondhia, CEO of Shojin, said: “Housing could not be overlooked today, not after Labour had made such a point of championing housebuilding as a key part of its election campaign. Hunt struck some positive notes, such as plans to make it easier for councils to fast-track applications for infrastructure projects, and potentially making it easier for houses to be converted into flats.

“But overall, this was a lacklustre statement for the property sector, with little substance to excite those building, buying and investing in UK real estate. In the longer term, at least, I welcome the decision to adopt the recommendations from Lord Harrington’s foreign direct investment.

"We must ensure the UK remains a hub for global investments, so any action to incentivise and remove friction from international investors seeking out opportunities in Britain is a step in the right direction, and the real estate sector could be a major beneficiary.”

Marc Vlessing, Chief Executive, Pocket Living: “With nearly 25% of young Londoners openly admitting in our recent research that they will be forced out of the capital due to high housing costs the lack of affirmative action to support SME developers and get builders building in today’s Autumn Statement is palpable.

"According to the latest data, construction starts in London are at the lowest point since 2009. Consequently, the industry is in dire need of support. Considering the Chancellor's focus on supply-side measures, this was an ideal chance to provide this backing as well as be radical and listen to those 66% of Londoners aged 25-45 who would have welcomed development on the green belt if it meant more homes.

"As a representative of the SME sector, it is therefore disheartening to see our suggestions for supply-side interventions—proposals that could potentially unlock an additional 1.6 million new homes, at no extra cost to the treasury —overlooked once more.”

Joe Pepper, CEO of PEXA UK comments: “With no dedicated policies on the horizon to boost property transactions, for homebuyers and homeowners, this Autumn Statement provides little relief.

“Those having to remortgage imminently will most likely be forced to pay far more than they do now, despite mortgage rates beginning to fall. This is only going to exacerbate existing affordability problems. Many buyers will be waiting for fixed rates to become more competitive before progressing with purchases, even with lower deposits and a green incentive on offer.

“We remain hopeful that the rate of inflation will continue to fall so that mortgage rates continue to fall in line, at which point we expect to see property transactions rebound. The current quiet period is the ideal time for the industry to come together and embrace the kind of technological innovation which will significantly improve the markets’ ability to scale and grow capacity in the months to come. This is going be key in transforming the property market, reducing friction and improving customer outcomes.”

Rod Lockhart, Chief Executive Officer, LendInvest: "We commend Mr Hunt's pledge in the Autumn Statement to streamline the planning system. Added accountability aligns with our ambition for a more efficient system and is a key factor in supporting the delivery of more homes across the UK."

Kathryn Hampton, senior expertise lawyer at law firm Ashurst said: "The biggest planning announcement is that from next year the Government will reform the planning system so that local planning authorities get the full costs of "major business" planning applications in return for deciding such applications within guaranteed faster deadlines.

"If they fail to meet the deadlines, the application fees will be refunded and the application will be processed free of charge. I assume therefore that planning fees will be going up again (if the applicant is to cover the whole cost).

"The announcement raises a number of questions: What is a "major business application"? How will the cost of the application be determined? Will an estimate be given with a final bill at the end? What will the deadlines be? If the fees are refunded how will the LPAs recover their costs? Will we see a load of authorities going bankrupt? Will this just mean that we see more appeals against non-determination?

"Whilst the announcement shows that the Government is alive to the chronic delay and under-resourcing issues within the planning system, it does not address the capacity constraints within local authorities. Perhaps local authorities will be able to hire or use private sector planners, but ultimately the system needs more planners with the skills to deal with the onslaught of other planning changes heading our way."

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