Chancellor of the Exchequer, Phillip Hammond, has delivered his Spring Statement this afternoon and amongst the Dad jokes he reaffirmed the government’s commitment to oversee the building of 300,000 homes annually.
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:
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.”