The Chancellor, Phillip Hammond, has delivered his second budget and used it to urge the UK to "seize the opportunities" from Brexit while tackling deep-seated economic challenges "head on".
As many expected, there was a larger focus on housing than in previous budgets, announcements included local authorities to be allowed to levy 100% council tax surcharge on empty homes, £44bn injected over the next 5 years to support housing market, promises of 300k new homes built per year and most notably the abolishion of Stamp Duty for first-time buyer purchases up to £300,000.
As ever, the property industry was quick to respond. Here's what they're saying:
Russell Quirk, founder and CEO of eMoov.co.uk, commented: "Today’s budget has amounted to little more than the annual dose of rhetoric and empty announcements of bold plans, extolling a robust intent to build more housing.
The Treasury’s ‘pledge’ to build more homes is a story we’ve been told many times before, but these well-worn, heady platitudes have not been fulfilled since way, way back in 1969 when the Beatles were topping the charts.
The likelihood of hitting the ambitious target of 1 million homes by 2050 is slim, to say the least, and one that is unlikely to be hit. The ‘urgent’ review of the gap in planning permission and the actual building of houses is also far too little too late and should have been implemented many budgets ago.
The Government must actually execute on a housing plan if the current housing crisis is to be remedied and not just grab headlines with their unqualified so-called intentions. This problem is not just about money. It’s about action and it’s about listening to experts within the industry for once.
A cut in stamp duty for first-time buyers is the only real sign of good intent by Chancellor Hammond and one that may help reignite the property market momentarily, but some may say acts as yet another diversion from the elephant in the room of a continued failure to build a meaningful number of affordable homes. Indeed a cynical electoral bribe."
Paula Higgins, chief executive, Homeowners Alliance, had this to say: "Finally the government has taken some bold action on the housing crisis. Stamp Duty robs buyers of much needed cash at the worst possible time and it’s been obvious for years that something needed to be done about it. Back in 2013 we launched our campaign to abolish Stamp Duty for first timers on the back of our report Stamping on Aspiration and I’m delighted the government has finally seen sense and recognised just how unfair and damaging this tax is. Under the new proposal 80% of first time buyers will not pay any Stamp Duty.
I would have liked to see more help for last time buyers too such as a Stamp Duty cut for downsizers. Freeing up larger family homes is essential for the fluidity of the market but there is currently no incentives to downsize and a lack of suitable properties to move too.
Mr Hammond should also have addressed the Stamp Duty surcharge issue for buyers who purchase their next property before selling their current home. Under the new system introduced last year these buyers are forced to cough up the extra 3% and must then go through the arduous process of claiming it back. The fact that refunds are currently running at £10m a month shows how flawed this system is. It would make much more sense for the Duty to be collected six months or a year down the line if the property isn’t sold. Home movers should not be penalised for the sluggish market.
While we obviously welcome the announcement that the government will build 300,000 new homes it’s worth remembering that the financial year 2016/17 was the first year since before the economic crisis that the government hit its housing target (of 200,000). It’s all very well acknowledging how many homes are needed but the government hardly has a good track record of achieving this."
Mark Hayward, Chief Executive, NAEA Propertymark comments on the stamp duty reforms announced in today’s Autumn Budget: “The announcement today from the Government to abolish stamp duty for FTBs will have a positive impact on the market. It’s a smart move to ensure the dream of homeownership for young people can become a reality and will help buyers across the UK, including London and the South East where property prices are higher.
We do however need to realise that this move will increase the demand for FTB properties and if we don’t have the supply it will push prices up. We have seen this in areas where Help to Buy is offered, as it attracts a great deal of interest from FTBs.
In terms of the Government’s plans to build 300,000 new homes a year, it is yet another pledge to increase the number of new homes created. While we welcome this news, we have historically had these announcements from Government to accelerate housebuilding which has not been delivered. It is not a question of ‘how many’, it’s a question of ‘how’.”
Jeremy Leaf, north London estate agent and a former RICS chairman, says: "The Chancellor's comments were encouraging as much for what he did say as what he didn’t. Firstly, the reduction in stamp duty at the lower level is hopefully just the tonic the market needs to improve transactions for first-time buyers in particular, in both lower and higher-priced areas. This should have a knock-on effect for transactions right through the market and the overall economy. The fact it is a permanent move adds welcome certainty to those buying now and those thinking of buying in the future.
The other bit of good news is that the Chancellor did not increase the rate of tax on buy-to-let investors. This would have had a detrimental effect on the supply of affordable property to rent as investors have been in retreat for some time.
We would have liked to see more encouragement of local authorities and housing associations to borrow more for new genuinely affordable homes if we are to have a realistic chance of hitting the 300,000 units per annum target that the Chancellor seeks.
We hope Homes England speeds up the delivery of housing solutions rather than talking about what needs to be done."
Simon Heawood, CEO and Founder of Bricklane.com on the abolishing of stamp duty for first time buyers for purchases up to £300,000 “While welcome, abolishing stamp duty is a drop in the ocean given the affordability challenge of getting Generation Rent onto the property ladder. Increasing supply of the right kinds of housing will also go some way to stopping ever-rising house prices, but many of Generation Rent still face the prospect of waiting many years to buy their own home.
The focus on bridging the housing generational gap must lie on the all-important first rung of the ladder – saving up for a deposit. The issue of housing supply and price is important, but looking at measures to support Generation Rent’s ability to get together a deposit is crucial.
The current situation will mean a continued reliance on the private rental sector so it’s welcome news that the government will be opening a consultation on how to encourage landlords to offer longer tenancies. Some forward-thinking landlords have been offering more stable tenancies for a while now and it is a great win-win – tenants get greater stability, enabling them to feel more at home, whilst our investors have the benefit of higher occupancy rates.”
Nick Sanderson, CEO, Audley Group, commented: “Cutting stamp duty for first time buyers will save them thousands of pounds on the purchase of their first homes and will remove one of the many barriers in the purchase market against consistently rising house prices. But the focus on the bottom end of the market alone is a blinkered focus and continues to ignore where much of the greatest potential in the market sits: the over 65s.
It is predicted that by 2037 there will be a 70% increase in the over 65 age group, yet the UK’s housing market is nowhere near prepared to meet the growing demand from first-time buyers, let alone to deliver retirement properties. Commitment to house building is welcome but not every first time buyer wants to move into a new build and stamp duty exemptions to help older buyers downsize would be far more cost neutral in the long-term. Two in five UK homes are under-occupied, of which half are occupied by those aged 50 to 69, in the main due to lack of quality accommodation for them to move into.
It’s time to address the facts: if we truly want to kick-start movement in the market, we need to stop continually plastering over the cracks and invest in quality housing options for the older generation.”
Benson Hersch, CEO of the Association of Short Term Lenders (ASTL), comments today on the Autumn Budget statement: “The Chancellor’s announcement that the Government will facilitate the building of 300,000 new homes a year, is welcome but ultimately we have heard promise after promise from successive Governments on house building, to little effect. Without a significant increase in social housing this is a pipe dream, especially as current figures include permitted development (offices to flats for example) rather than 'ground up' building.
For many, a house to call their own remains out of reach as the deposits required are still too high. Recent analysis undertaken by the ASTL of our membership shows that bridging loans are increasingly popular forms of finance for people looking to purchase their own homes. Such a trend demonstrates how alternative forms of finance are increasingly providing the solutions where Government should be and could be bridging the gap.”
Jeff Knight, Director of Marketing at Foundation Home Loans, said: “Of all the announcements to be pulled out of the red box this time round, the abolishment of stamp duty for first time buyers was one of the most highly anticipated. Now confirmed, it will certainly inject some more momentum into the purchase market and give those starting out a leg-up in the face of increasing house prices. However, maintaining the current rate of stamp duty for landlords will naturally cause them to ‘batten down the hatches’ and protect their income. A quarter of landlords said they would increase rents next year if there was no change in this policy - unsurprising given the raft of changes to buy to let.
In reality, the commitment to building more homes and addressing planning regulation is what we needed to address the supply and demand imbalance, but affordable homes do not have to equal ownership and there should also be a focus on developing good quality, affordable homes that can be rented. Doing this will not only support tenants while they save for a deposit, but will further open up PRS to the more motivated, professional landlords who can inject fresh energy and ideas into the market.”