Housing was not a focus of Chancellor Philip Hammond’s first Spring Budget on 8 March 2017. CEO of The Guild of Property Professionals, Iain McKenzie, shares his thoughts on what the government can still do to support the housing market.
“It was disappointing that Chancellor Philip Hammond did not show an understanding of how crucial it is to support the housing market at this uncertain time. The lack of measures to support first-time buyers, investors, and homeowners could have a negative impact on the industry over the coming year. At the Guild, we hoped to see a clearer commitment from the government to ensure the success of the housing market both in 2017 and in years to come.”
“The housing market has been impacted by the rise in Stamp Duty far more than anything else over the last 12 months, even more than Brexit. By ignoring calls from the industry, the Chancellor has set back the housing market, particularly with buy-to-let investors who are hit with an additional 3% of stamp duty when buying second properties. This could have a negative knock-on effect on the rental market.
“These measures were initially brought in to allow first-time buyers to get onto the housing ladder. Only time will tell if this will prove to be effective. As it stands, only 39% of adults under 40 own a property, compared with 61% from 20 years ago.
“The lack of change means that the top end of the market could continue to move slowly, particularly with homes valued over £1,500,000.”
“The government announced a new National Productivity Investment Fund (NPIF) to provide £23 billion of high-value investment between 2017-18 and 2021-22. One of the objectives for this fund is to accelerate housing supply. This is a good step for first-time buyers. An increase in home building could ensure that more affordable, good quality homes are available to help people onto the housing ladder.
“However, more needs to be done to ensure that enough new homes are built to fulfil an increasing demand. I think that the government needs to look again at planning regulation for councils to allow new building projects to be approved without delay. It is unpopular with some, but building on the Green Belt may be necessary to meet demand.”
“There was no update on the banning of rental fees in the lettings market. The government previously stated that the ban would come in ‘as soon as possible’, and there was no new guidance at the Budget as to when this could be. I agree that renting should be more fair for tenants and that there should be complete transparency around fees. However, there is a high chance that scrapping rental fees could lead to landlords charging higher rates for tenants, negating any monetary benefit for either party.”