The Chancellor also announced 26,000 new affordable homes in the capital and highlighted that 60,000 first time buyers have already benefited from Stamp Duty relief which was announced during the November 2017 budget.
Additionally, the Housing Growth Partnership, which provides financial support for small housebuilders, will be more than doubled to £220 million.
As ever, the property industry was quick to react. Here's what they're saying:
Russell Quirk, founder and CEO of Emoov.co.uk, commented: “Reaffirming to see the Chancellor yet again cover the hot topic of housing, but we still haven’t seen the delivery of promises from previous budgets, so only time will tell if these words will actually equate to action. If it does come to fruition, his pledge of 300,000 homes a year will go some way in addressing the UK’s housing crisis.
Today’s additional announcement of 215,000 homes within the West Midlands region by 2031 will see an already strong area of the UK property market further accelerate where price growth is concerned. Despite uncertainty plaguing the current property landscape, these more affordable regions have seen a sustained level of buyer demand and so this increased investment into the local property market should only see this continue.
In contrast, London has been one of the worst hit in terms of a dwindling appetite for property amongst buyers. While the commitment of 26,000 affordable homes in the capital and a total of 116,000 affordable homes by 2022 would be a step in the right direction, the government delivered just under 7,000 affordable homes in 2017. So, there is quite a large gap between their good intentions and reality and this is simply not adequate enough to fix London’s broken housing market.”
Richard Pike, Phoebus Software sales and marketing director, said: “Bearing in mind that it is only four months since the investment of £44bn to raise housing supply was announced, it appears the government is indeed holding to its promise of making housing a priority. The Housing Growth Partnership budget has increased, which means more support for small housebuilders. This is a vital element in getting the housing we need built, in the areas where people want to live. However, the question is how that money finds its way to the developers and how they can combine it effectively with other funding to get each project underway and finished.
The most frustrating thing for many, following today’s speech, is that we will have to wait until the budget in November to find out how the government intends to tackle the gap from planning permission to build completion. This issue is one that really needs to be undertaken sooner rather than later so that land banking becomes a thing of the past.”
Simon Heawood, CEO at property investment platform Bricklane.com, comments: “Philip Hammond’s announcement in today’s Spring Statement that an investment programme of £44 billion will see the UK on track to deliver 300,000 houses by mid-2020 is great news, provided it is actually delivered. We're seeing movements towards the government really dealing with the affordability crisis, though we believe a holistic set of solutions is required to meeting this complex challenge. The recent cut to stamp duty and building announcements are welcome for those lucky enough to be able to buy. We would like to see more done to help those saving to get on the ladder, as well as moves to further professionalise the rental market for tenants."
Neil Knight, Business Development Director at Spicerhaart Part Exchange & Assisted Move, had this to say: “In his Spring Statement today, the Chancellor highlighted the £44bn housing pot that he announced in the Autumn statement, and said that his housing minister in working with 44 councils that have bid for the £4.1bn housing infrastructure fund. Mr Hammond also announced that the Government has agreed a deal in the West Midlands where that local authority will be getting a £100m grant from the land remediation fund to deliver 215,0000 homes.
It is very encouraging that the West Midlands is receiving such a substantial grant. Following the Spicerhaart group’s latest acquisition Staffordshire based estate agency business butters john bee, we have widened our coverage into the West Midlands so this announcement is very pertinent for us. We know the West Midlands is in desperate need of new housing and where usually, funding tends to be focussed on London and more recently, the North, it is encouraging to see a deal like this in the Midlands.”
John Philips, group operations director at Just Mortgages and Spicerhaart, commented: “In his Spring Statement today, the chancellor announced plans for 215,000 new homes in the West Midlands and an extra 26,000 in London, which given the current housing crisis will come as welcome news for first time buyers particularly, because the demand for affordable first time buyer homes higher than ever.
Last year saw the highest number of first time buyers in a decade and January this year a 7.7% rise in gross mortgage lending. At the time I said this was likely a combination of low rates, the help to buy scheme and latterly, the stamp duty changes announced in the last budget. We can now see that these changes have in fact had a huge impact on the market with the chancellor that 60,000 first time house buyers have already benefited from the change.
The Chancellor also announced that inflation is predicted to return to its 2 per cent target over the next 12 months, which suggests that the speculation over further rate rises may be just that. The reason for the recent rise was to curb inflation, but if it is due to fall back naturally over the coming months, these rate rises may not happen, meaning borrowing conditions will remain favourably low.
We have heard housing promises before that have not come to fruition, however, if the Government and the local authorities uphold their commitments, these new affordable homes, combined with the incentives for first time buyers and low rates could mean 2018 is even better for first time buyers than 2017.”
Brian Berry, Chief Executive of the FMB said: “The Chancellor’s announcement of a consultation to tackle the scourge of late payment today should mark a turning point on this issue. We should use this opportunity to bring about a spring clean of payment practices which negatively impact on small business. Construction giant Carillion’s collapse at the start of the year brought to light once again the need to eliminate poor payment practises that plague the construction sector particularly. Indeed, one London based small building firm was once paid more than 270 days late by a construction giant. Now is the time to move away from these unsustainable business models which threaten the existence of many firms and their supply chains.
This announcement today should be followed by a fundamental rethink ending in the permanent abolition of late payment terms and the exploitative use of retention payments.
At first glance the Spring Statement has brought some other positive announcements for the UK’s small construction firms. The announcement of a doubling of funding to the Lloyd’s Housing Growth Partnership and an additional £80 million funding to support SME firms looking to engage an apprentice is welcome news. With Brexit looming large on the horizon and the construction industry facing a chronic skills crisis, it’s of the utmost importance that more skilled workers begin to join the sector. An additional £50 million to support T level training will further aid this aim.”
Jeremy Leaf, North London estate agent and a former RICS residential chairman, says: "We welcome the Chancellor’s reiteration of the importance of the housing market and how tackling the housing crisis is key to all other economic policies, with particular reference to longer-term building projects and trying to address capacity issues by giving further assistance to apprenticeships.
However, at grass roots level what we are really lacking is supply and transaction numbers. If these were to be improved, on the one hand it would keep property prices in check and on the other it would generate real benefits for not just the housing market but for the economy as a whole.
The stamp duty concessions have definitely prompted more interest among first-time buyers, who are often taking the place of investors at the lower end of the market. But further help is needed to make a real difference, not just at the bottom end of the market but right through to the top end if we are to achieve genuine growth."
Neil Cobbold, Chief Operating Officer of PayProp in the UK, had this to say: "Due to the shift to annual Treasury reporting, the Spring Statement was not as in-depth or wide-ranging as an annual Budget. That said, relatively few housing measures and spending plans made it into the Chancellor's statement.
The government has consistently promoted its commitment to fixing the UK's 'broken' housing market, so we expected more updates to this effect.
Some of the housing measures yet to be addressed or finalised, include the ban on letting agent fees, the proposed extension to mandatory HMO landlord licensing and additional regulation of the private rental sector.
The government is clearly committed to addressing the UK's ongoing housing problems. Increasing the supply of available homes to buy is a key strategy and one that could have obvious positive outcomes in the future.
However, one issue that is potentially being overlooked is affordable housing in the private rental sector. Private tenants now account for a fifth of all households and the latest annual English Housing Survey shows that renting is now the largest housing tenure in London.
It could, therefore, be beneficial to move away from the notion that everyone wants to buy a home, embrace the rental revolution and work out how to provide more high-quality, affordable rental housing.
The Chancellor revealed that the stamp duty cut for first-time buyers announced in November’s Budget has benefitted over 60,000 property purchasers.
Moving forward, what could be valuable is a government investigation into the 3% stamp duty surcharge on additional homes and how it has affected the rental market during the two years it has been in operation.
The ban on fees has been hanging over the industry for almost 18 months and it would benefit all parties involved in the private rental sector to have a solid date to work towards.
For the majority of agents, plans to mitigate the effect of the ban will already be in place and now is the time to put these plans into action and make sure your business is ready to adapt to this huge market change.
Agents need to ensure they are exploring ways to streamline their processes, generate additional revenue and improve their landlord proposition.
Paresh Raja, CEO of MFS, said: “Today’s modest, if not lacklustre, speech offered few meaningful solutions to the long-term challenges facing the property market – albeit this was expected after Philip Hammond’s warned the nation to expect no frills from his speech. While the announcement of higher growth in the economy is welcomed, the decision to water down the Spring Statement so much is not. After all, underlying problems such as housing supply won’t wait until the Budget in the Autumn.
Yes the Chancellor reiterated that £44 billion was available to help hit new-build targets, but following Theresa May’s housing speech last week, today’s announcement could have taken further steps towards developing a successful plan for helping more people get on or move up the property ladder. Instead this job has been left to the housing secretary, who will purportedly be making further announcements in the coming days."
Leon Ifayemi, CEO and co-founder of SPCE, comments: “Today’s Spring Statement was somewhat disappointing. While we knew that the Chancellor’s decision to move the Budget to Autumn meant the new Spring Statement might be light on new policies, the lack of more new spending commitments was still troubling.
As the property and rental markets face fundamental issues such as housing supply, lack of affordability and rising rental prices, the Government is still not doing enough to directly address these problems; instead the Chancellor continues to set targets for new-build properties, and only time will tell if these are met. It is a shame for renters in particular, because this was a great chance to build on previous reforms, such as banning lettings agent fees and cutting stamp duty for first-time buyers. Let’s hope the Autumn Budget can reverse this oversight.”
