Sunak revealed the Fund in today's Spending Review, saying: “I can announce we will establish a new UK infrastructure bank. Headquartered in the north of England, the bank will work with the private sector to finance major new investment projects across the UK, starting this spring.”
Neil Cobbold, Chief Sales Officer at PayProp, comments: "Understandably, today's Spending Review focused on funding for public services in light of the ongoing COVID-19 pandemic, even if the property industry had hoped that the Chancellor would use the address to provide clarity on issues such as the stamp duty holiday and proposed changes to Capital Gains Tax (CGT).
"In recent weeks, there have been many calls for the stamp duty holiday to be extended. A longer period for property buyers to benefit from significant tax savings would provide the market with a welcome boost as we approach the New Year and the effects of record-breaking sales volume this summer start to wear off.
"A stamp duty holiday extension would also encourage further investment in the private rented sector (PRS), potentially leading to much-needed new homes for tenants entering the market.
"Meanwhile, it appears the government is still reviewing the recent proposals made by the Office for Tax Simplification to double CGT rates and lower the number of exemptions. It seems unlikely that a decision on this proposal will be made in the near future as the government's focus remains on managing the impact of the pandemic.
"However, if changes to the CGT system are made in the future, due consideration should be given to the impact they could have on buy-to-let landlords and property investors.
"Doubling CGT rates could have the unintended consequences of a mass buy-to-let sell-off and less future investment in the PRS. The government needs to raise revenue to fund its response to the pandemic, but it can strike the right balance without severely affecting sectors like the PRS which provides homes for millions of people."
John Goodall, economist and CEO of buy-to-let lender, Landbay, said: “In a year that has seen the highest borrowing in peacetime history, the housing market has held up remarkably well. Buoyed by the stamp duty holiday, demand to buy still outstrips the supply of housing by some margin, so the need to increase the housing stock grows ever more urgent. The Chancellor’s £7.1bn national home building fund is a step in the right direction but needs to translate into action, so we really see more homes being built and quickly.
“With unemployment to hit 7.5% next year and stamp duty reintroduced, it will be harder for many people to buy, but that doesn’t take away the need for housing. With councils and housing associations unable to meet this need, that demand will inevitably fall on the private rental sector instead. While the government needs all the income it can get, tapering of the stamp duty holiday beyond 31st March and support for landlords to provide good quality rental property is what is needed to help meet this housing need as the need for rental property is likely to hit heights not seen in modern times.”
Bryan Mansell, co-founder of proptech platform, Gazeal, adds: “The Chancellor's Spending Review inevitably focused on funding for public services in light of the Covid-19 pandemic. The property industry will have been calling out for updates on the stamp duty holiday, but will be pleased to see a funding announcement on how the government intends to rectify the UK’s housing shortage."
