As news hits us that Stamp Duty is to be abolished for first time property buyers purchasing property under £300,000 along with the underwhelming downgrade of the official economic growth estimations, reactions from our experts are as follows.
Paresh Raja, CEO of bridging specialist MFS stated “After an underwhelming Spring Budget that completely overlooked the property market, this time around the Chancellor has at least announced some reforms that will benefit homebuyers. While stamp duty has been cut for first-time homebuyers, the amount of money this will save prospective buyers is in reality still limited – the average first-time buyer spends £200,000 on a property; abolishing stamp duty for them will save them just £1,500.
“Importantly, homeowners looking to upgrade to another property still face the heavy financial burden of stamp duty, which will ultimately deter them from moving house. I fear this will have significant implications in the longer term, decreasing the number of people moving from their first property purchase, and thereby reducing the number of properties available for first-time homebuyers, and reducing movement in the market as a whole.”
Fareed Nabir, CEO and founder of online lettings app LetBritain commented “Having acknowledged the growing number of Brits stuck in rental accommodation, it’s pleasing to see the Government deliver a Budget heavily geared towards the lettings market. With 7.2 million households likely to be in the rental market by 2025, the Chancellor has seized the opportunity to continue with the recent wave of reforms by offering tax incentives for landlords guaranteeing tenancies of at least 12 months. This should hopefully have a trickle-down effect on rental prices, offering more financial manoeuvrability for tenants saving to buy their own house – something the Chancellor has made easier – while also providing additional security for renters.”
Whilst Steve Burrows, managing director of LateRent and Landlord Secure: a company which offers a free service allowing landlords to report payment history to credit reference agencies so tenants who pay on time can build up a good credit history suggested: “Abolishing stamp duty is not enough. It’s oddly out of step that tenants are still unable to utilise rental payments as part of their credit profile to get a mortgage. We know this has been a rising frustration amongst renters for many years. It’s time for the government to sit up and listen to this often-overlooked market, and stop simply paying lip service to their own housing policies.”
Meanwhile Jonathan Stephens of Surrenden Invest commented “So Hammond’s housing plan has been announced and overall there are a number of positive takeaways.”
Firstly the abolition of stamp duty for first time buyers on properties up to £300,000 is of course good news as this will enable those looking to get onto the ladder a long-overdue helping hand.
Interesting we, an investment agency, have been selling an increasing number of properties in the UK’s major cities to first time buyers over the last 3 – 4 months and in light of this new ruling on stamp duty, expect to do so even more in the coming months and years.
For our other clients, the buy-to-let investors, the worry that a stamp duty gift to first time buyers would be at their expense has not materialised which will of course be a great relief.
Secondly, and maybe the most important announcement of the day, has been the pledge of £44bn of capital funding to boost the housing market including a new SME housebuilding fund.
Investment and support from the government to encourage and enable (through access to cheaper finance) developers of all sizes to build can only be positive and this, coupled with the tightening of laws around planning permissions and the ability to hold land without development, will hopefully result in the levels of housebuilding required to be delivered.
With this is mind, I look forward to the findings and suggested actions of the newly commissioned report next year.”
Graham Davidson, managing director of buy to let specialist, Sequre Property Investment, comments:
“The spotlight was firmly predicted to shine on the housing sector and the Chancellor did not disappoint. It’s exciting to see the government really getting on-board with the challenging property market and keen to address the property shortage we are currently experiencing across the UK.
“For buy to let landlords, there was a vague nod to offering longer tenancies in rental agreements which may result in some welcome tax relief, but the outcome will remain unknown until the newly promised consultation goes ahead. Despite a challenging few years for the buy to let sector, investors in the north have remained relatively unscathed despite the previous changes to SDLT and mortgage relief; this longer tenancy would not only be of benefit to landlords in terms of minimal void periods, but also their earnings. This, combined with strong capital growth potential is likely to serve as a further boost for buy to let activity in urban cities such as Manchester and Liverpool where more new homes have been promised. Unfortunately for the London market, so much red tape and astronomically high house prices means it’s unlikely this will be enough to result in an attractive property investment.”
Henry Fordham of Bellis Homes comments below:
“We are pleased to see widespread reform and investment in the UK housing market. Although abolishing stamp duty for first time buyers is a positive step, it being limited to £300,000 means its impact is minimised in many areas where many young professionals are required to work and live, such as London and linked commuting areas.
I feel the Chancellor should have committed to his consideration of a temporary stamp duty holiday. Such a measure would of ensured the most immediate catalyst across the market and country as a whole to the benefit of the economy.
As this would have supported total market transactions and had the greatest impact on the housing market, professionals within it and home owners looking to move, up or downsize. Meaning a large proportion of the market is still restricted which could have been supported to the benefit of the economy.”
Finally James Allen, head of Walker Crips Alternative Investments, commenting on the property announcements in today’s Budget told us:
“The Chancellor reaffirms his commitment to get average house building numbers up to 300,000 per annum and realises that this cannot be achieved by the major housebuilders alone. His commitment to support SME housebuilders, lift the borrowing cap on councils that have high house building needs and fund training in the construction industry provides a three pronged attack which, for the first time in decades, actually has the chance of succeeding in delivering the housing stock the country needs.
“This is an example of practicality trumping ideology and should be supported by the vast majority of the population. Following his promised reform of the planning system, if he could also address the non-implementation of planning approval by developers I would predict his 300,000 new build target would be met.
“Abolishing stamp duty on the first £300,000 spend by any first time buyer is a welcome help to those looking to get onto the housing ladder, but it does not address the real issue which is affordability. There are many brownfield sites in London that could produce studio flats which would attract no stamp duty after this latest announcement from the Chancellor.
“Many of these sites have had planning for years (having to be renewed every three years), but are still to be developed. If developers were not allowed to renew planning but instead had to sell the site if their planning lapsed, we would see a vast reduction in the gap between planning approvals and delivery of new housing stock.
“The Chancellor should heed his own advice when he said there was not one magic bullet to solve the housing crisis and he should now turn his focus onto the implementation of planning approvals.”
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Daniel Peacock