"Another golden opportunity to address the ‘elephant in the room’ has gone amiss....."
The Chancellor of the Exchequer, Philip Hammond, has delivered the last ever Spring Budget we will see. And for reasons only known to him, decided to skip the 'housing part'.
How did today's Budget impact the property industy?
Well quite angrily as you would expect given that there was no mention of anything housing related whatsoever.
As ever, the property industry was quick to react to the news (or in this case, lack of it). Here's what they have been saying:
Russell Quirk, founder and CEO of eMoov.co.uk, had this to say: “Zip. Nada. Zilch… Nothing….
A bitterly disappointing, lacklustre Budget by Mr Hammond in terms of addressing the current UK housing crisis. It is clear he is continuing the head in the sand approach of those before him in bypassing the issue, with a few headline-grabbing business initiatives and the usual proclamations about how great the economy is currently performing.
Ironic that a former property developer should give the subject such inadequate focus within his plans and woeful for those aspirational buyers on the ground still dreaming of getting on the ladder.
The issue of housing has become the final coat of gloss on recent budget announcements, mentioned in passing to tick the boxes of a “well rounded” economic plan, but equating to little more than aesthetic fluff.
A lot of focus on the NHS and how they are the party of the NHS. Does NHS stand for No Housing Speech?"
A real shame Mr Hammond hasn’t put his mind to solving backlash around the revaluation of business rates. There is an underlying feeling of angst throughout the population surrounding this uncertainty and he would have done well to use his first Budget as a platform to quell these feelings, but has in effect, chosen to sidestep the issue.”
Paul Smith, CEO of haart estate agents, said: “Today’s Budget marks another missed opportunity to create fundamental reform to the UK’s long-suffering property market.
The Housing Minister merry-go-round has left housing issues at the periphery of government thinking and strategy. Continually kept at an arm’s length, they’re incapable of tackling the deeper seated issues within housing market – leading to a plethora of initiatives that that tamper with rather than tactically reform the market.
Whilst it’s good to see the government committing to increase funding for infrastructure, including more school places, which will certainty increase housebuilders appetites – what we really need to see are stamp duty holidays and tax reliefs to increase investment opportunities, expanding the pipelines of housebuilders and introducing fluidity into the market.
The Chancellor today said he wanted to ensure the next generation have the same opportunities to fulfil their aspirations – but clearly this does not extend to home ownership. Until the foundations of the market are rectified housing numbers will not improve and the plight of the first-time buyer will never be cured. Bold and brave reform is needed to make a mark on generations to come, and a Housing Minister who sticks around long enough to see the fruits of his labour would also not go amiss.”
Graham Davidson, director of Sequre Property Investment, comments: “Private landlords, who are vital to providing rental accommodation for our population, continue to remain in the Government’s firing line thanks to the lack of review or reconsideration of the additional 3% stamp duty on second properties and incoming reduction on mortgage interest rate relief, which we would have liked to see some reform on. However, the reality is that bricks & mortar remains a stable and rewarding investment, with savvy investors able to easily overcome the changes if purchasing the right type of property in the right location.”
James Davis, CEO and founder of online lettings agency, Upad, comments:
The Government is playing with people’s lives and livelihoods
“It must be a first that there was no mention of housing in today’s Budget.
In particular, it was disappointing to not see a U-turn on the catastrophic decision the Chancellor made in the Autumn to ban lettings agent fees. As predicted, rising rents are already on the cards for long suffering tenants with renting now a necessity, as home ownership is out of reach for most Millennials.
Tenants are in some cases already paying up to two thirds of their salary on rent, whilst salaries have stayed stagnant. This will have wider consequences if people can’t afford to go on holiday, or spend money on entertainment – the mental health of the country will suffer and other industries will bear the brunt of this lack of spending. The Government need to realise that they are playing with people’s lives and livelihoods. They need to listen to the people.
Stop landlords from being used as a political football
“Landlords have been used as a political football in the last 12 months, with buy-to-let taxes set to increase from April and no announcement of this being blocked today. Landlords need attracting back into the space rather than being pushed away. Ultimately, it will be the politicians with red faces, as more people fall into arrears and the social housing space, as they can’t afford private rents anymore. Buy-to-let landlords should be enticed through tax incentives, rather than hiking stamp duty, to bring the rental market back into equilibrium.”
Robin Paterson, Joint Chairman & CEO of United Kingdom Sotheby’s International Realty, comments: “After countless calls from the industry for stamp duty reform, I am disappointed to see the Chancellor has continued to ignore the issue. The stamp duty levy continues to have a detrimental effect on the housing market, especially on homes priced over £2 million.
At the very least, the Chancellor should have reduced second home stamp duty on buy to let properties and kept the rates as they are for those with multiple homes they use as residences. These landlords are providing much needed rental accommodation, especially in densely populated cities such as London. The more the government picks on the landlord the more rental prices will increase and home ownership will continue to decline.”
Henry Smith, CEO, Aitch Group: “Another golden opportunity to address the ‘elephant in the room’ has gone amiss. The government has yet again chosen to ignore the effects of a stamp duty levy which is damaging the UK property market, as well as reducing the government’s own tax takings. Lower receipts, reduced transaction volumes and a slower rate of housebuilding have come to define a policy that prevents the housing industry from performing its role effectively.
We are already seeing the 3% surcharge on additional homes impacting the Build to Rent sector and investor confidence, and the effects are being disproportionately felt in the capital where prices are much higher than the UK average. Whether it’s developers, agents, architects, contractors or investors, the negative impact of stamp duty is having an impact across the industry and it is no surprise that leading figures and bodies are demanding a change.”
Glynis Frew, Chief Executive of Hunters Property Plc, had this to say:
No White Paper Follow Up
“The real underlying issue in the housing market is affordably priced homes. The recent Housing White Paper proposed more starter homes for first time buyers, we were keen to hear more on how and when these homes will come to fruition.
The White Paper also discussed releasing land to build, which again is fundamental to helping the housing market. When demand is high and supply is low due to lack of building this drives prices up. It would also have been beneficial for the Chancellor to expand on this.”
Housing Minister Should Join Cabinet:
“The government has openly stated that our housing market is broken, I don’t agree with that but do believe that housing is a fundamental necessity, and therefore should be high on the political agenda. As such, the Housing Minister should join the Cabinet. This would give the issues associated with housing a lot more profile across government. Personally I would welcome regulation of the industry so all agents operated on a level playing field.”
No mention of stamp duty:
“It was unsurprising but still a shame the Chancellor did not address the issues with stamp duty. Stamp duty should be slashed for first time buyers, it is absurd to think first time buyers in London and the South East are finding themselves in the third tax band and are therefore paying a whopping 5% when first stepping onto the ladder. It is no secret there are less first time buyers entering our market than ever before and this unfortunately has a knock on affect for second steppers and further up the ladder.”
Robert Fraser, Managing Director, Fraser & Co comments: "The industry will be disappointed that another opportunity to reform Stamp Duty has been overlooked by the Government. The impact of this counter-productive tax arrangement is being felt at every level of the market, from international investors, to downsizers and first time buyers, where prices at the higher end are faltering and competition at the lower end of the market is intensified.
Transaction volumes have remained strong and steady, but it is no secret that they are not reaching the level they could be. We are living in an unpredictable period in which the London property market needs to be attractive from both a domestic and international perspective, ensuring that conditions are created for the industry to thrive."
John Goodall, CEO and co-founder of Landbay comments on today’s Budget: “For all the talk of easing the pressure on affordability in last month’s housing white paper, Hammond’s Budget was underwhelming to say the least. By not raising the stamp duty threshold, the Chancellor has missed a valuable opportunity to improve access to the housing ladder for millions of aspiring homeowners in the UK, for many of whom the tax is the final straw when facing prices that continue to climb.
Stamp duty is a significant barrier to liquidity in the market and any increase to the threshold would help to reverse the falling home ownership numbers and transaction volumes. I hope the situation is reviewed in the Autumn Budget.”