Whether you voted remain or leave, the government’s inability to progress Brexit has been a source of much frustration. In a bid to win a commons majority and finally get a withdrawal bill through parliament, Prime Minister Boris Johnson has called for a general election – the first in December since 1923 – after Jeremy Corbyn reconsidered his opposition to one. The former is hoping that the public will vote for his party out of a desire to get a deal done. This could come to pass, but Theresa May’s experience in 2017 shows that nothing is certain when it comes to a general election.
As a result of the Brexit extension, the 2019 Autumn Budget originally scheduled for November 6th has been cancelled. At a time of severe uncertainty, the Autumn Budget could have been an opportunity for the Boris Johnson government to set forth its agenda and provide some much-needed assurances to business leaders. Instead, prevarication and delay have once again prevailed.
For those in property, therefore, the cancellation of the Autumn Budget is a frustrating one. House prices, according to Nationwide’s recent house price index, are stagnating, with the average rate of house price growth remaining below 1% for the 11th consecutive month. With Brexit uncertainty likely to have some effect on the market over the medium term, the Autumn Budget could have provided us with reforms designed to address the housing crisis and increase the number of people able to progress up the property ladder.
We will now be likely forced to wait until the new year for news of the government’s plan, so long as there isn’t another delay. What policies, then, should the government in its 2020 budget to help make up for the dampening effect of Brexit over the past three years?
A number of policy suggestions come to mind. But of particular note is some heavily touted stamp duty reform. Previously backed by Boris Johnson during his leadership campaign, there have been various proposals to raise the threshold at which it is paid. Although Chancellor Sajid Javid recently backtracked on such proposals, there are reports that the government is considering abolishing stamp duty for buyers generally or for homes worth up to £500,000. Either reform would be a welcome change that would help increase liquidity and provide those nearer the lower end of the property ladder with a leg up. This is exactly the kind of policy that could help to reinvigorate the property market post-Brexit.
There are other plans that could help to make new build homes more appealing to buyers. Firstly, Housing Secretary Robert Jenrick announced design guidelines for developments in England as part of the ‘Building Better, Building Beautiful’ inquiry. The proposals suggest new homes should be built in line with more traditional, natural themes to make them more attractive. Other plans for more infrastructure to help improve new build connectivity also came from Sajid Javid at the Conservative Party Conference in late September, including a roads package worth £29 billion.
Whilst these sort of flagship policies are important, other, more subtle reform, will also be important. Recent research from Market Financial Solutions revealed one-third (30%) of landlords do not understand HMO licensing. Similar numbers admitted not knowing what the abolition of Section 21 means (28%). These are worryingly high figures, and if the government implements the kinds of changes I have suggested, a lack of understanding could become more entrenched. Which is why it’s so crucial the government implements much more far-reaching landlord education – without it, many in the industry may be left behind by the pace of change.
The Autumn Budget would have provided the perfect opportunity for the government to implement stamp duty change and bolster new-builds. With it again pushed back because of Brexit, many in the property market will be frustrated that a lack of certainty and leadership will define at least the immediate future. One can only hope that the government will prioritise these sorts of policies if the once the opportunity presents itself in 2020. Let us hope it is sooner rather than later.
