Yesterdays budget was pretty innocuous for the housing market as fears elsewhere (like the financial markets and Coronavirus for example) ravage on, causing more uproar than the Chancellors financial plans for the United Kingdom moving forward can do.
That said we still have plenty of thought from the leading property experts that we wanted to share with you so take a look below on reflection.
Following the budget Brendan Sharkey, Head of Construction and Real Estate at MHA MacIntyre Hudson, says the Chancellor has succeeded in spreading new work around the country.
“Without question the budget is good news for construction overall; the measures to develop infrastructure, particularly new roads, flood defences and broadband will complement existing investment to ensure companies have enough work. Particularly welcome is the £1.1 billion in funding earmarked for different regions of the UK through the Housing Infrastructure Fund; this will guarantee work for owner managed businesses outside the capital.
“No change to Help to Buy is also positive news because of the support it provides to the housing market. However, the Stamp Duty surcharge on non-UK residents is very unlikely to fulfil the government’s stated aim to keep house price inflation in check; the extra cost won’t deter most foreign buyers because they can offset the small additional cost by buying when the exchange rate is favourable.
“The cloud on the horizon is labour. It’s unclear whether the industry has the workforce for all the upcoming infrastructure projects and the new immigration system creates more uncertainty. Notably the Chancellor did not announce reliefs or grants for capital investment, which would have been one obvious way to mitigate the labour issue.”
Stephen Pratt, Director of National Developer Godwin Developments stated balance is key suggesting…
“A balanced long-term strategy is required if we are to solve the UK housing crisis quickly”
“We welcome the chancellor’s ambitious plans to support the economy and invest significantly in strategic infrastructure over the next five years, including roads and railways, such as the ground-breaking HS2 project.
“The budget is a compelling confirmation that the UK government is committed to ensuring long-term economic prosperity whilst bringing balance throughout the country by creating opportunities and providing support for both individuals and businesses.
“The £12bn extension of the Affordable Homes Programme and the social housing interest rate cut for local authorities announced today are important components in addressing the UK’s housing crisis. The £1.1bn allocation from the Housing Infrastructure Fund to build 70,000 new homes in high demand areas is also a step in the right direction and we are delighted to hear that the government has pledged £400m towards the repurposing of brownfield sites across cities and towns.
“Affordable homes are high on the national agenda because the UK has been experiencing a housing crisis for years, which is fuelled by our growing population, rising urbanisation and increasing house prices.
“If we are to find a sustainable long-term solution to the housing emergency, a policy that focuses on home ownership, private rental properties and affordable housing is required.
“As a national developer with experience across a range of residential sectors, we believe that a more balanced approach is necessary – one that includes ownership as well as support for the creation of high-quality rental properties, whether at market or affordable rates.
“It is possible to build more higher standard properties in towns and cities where people want to live and work – homes that are safer, more environmentally sustainable and address the national target of 300,000 new homes per annum.
“For this target to be achievable, we need a significant increase in resources across planning departments throughout the country – we noted the chancellor’s comments on new measures to bring the planning system into the 21st century and we look forward finding out more details tomorrow. We hope these reforms will facilitate a faster approval process and an equal footing for rental and home ownership developments, so that together we can successfully – and quickly – regenerate industrial wastelands into thriving communities.”
Sarah Morris of SevenCapital stated
“The introduction of a reduced 2% surcharge will of course be a welcome move should it be effective in raising the Government’s target £650 million funding to help rough sleepers across the UK. It will also prompt a level of relief for non-UK resident property investors against what was initially speculated to be a 3% surcharge that might have been implemented within the next few months.
“Where these investors are concerned, whether they be overseas nationals or British expats wishing to keep their wealth within the UK, this move is likely to be met with relief and extended opportunity. The allowance of a further 13 months until the levy is implemented will be welcomes by those wanting to get into the market ahead of time, as will the slightly reduced levy amount for those who were expecting the higher figure.
“For the UK’s residential property market this may of course mean a slight shift over the coming 12 to 24 months. Ahead of the April 2021 date we are likely to see a heightened interest or sense of urgency, particularly in the UK’s prime residential markets, as investors seek to secure their investment ahead of time and avoid paying the extra stamp duty.
“Post April 2021 is where the market may need to prepare itself for a potential adjustment in buyer activity. What is a likely outcome from investors at the lower end of the UK’s prime markets is a step change in how they invest; buyers who typically choose London’s prime residential markets, particularly those buying at the lower end, may reconsider their strategy to purchase higher volumes of lower priced properties, at a lower stamp duty band in order to maintain the level of tax they are currently accustomed to. We may also see investors choosing other investment vehicles including incorporation as a sustainable property investment operation.
“Additionally, the UK’s regional cities and areas outside London could see heightened interest from overseas buyers post April 2021 as they look to prime or high growth markets in alternative, better value locations than the capital, to avoid the need to for extra expenditure on tax.
“Should this happen, of course this will then prove to further boost house prices in these regions.
“We have already begun to see a shift in the market over recent years with both domestic and international buyers choosing to buy outside London, and this surcharge is likely to act as a further catalyst, particularly where overseas buyers are concerned.
“If the UK is looking to rebalance the property market then this may go some way in helping this along.
“What won’t change however is the fact that the UK remains widely recognised as one of the most stable and strongest markets in the world in which to invest in property. Ultimately, for those who invest in property for the long-term, an adjustment in stamp duty in the short term is unlikely to water down the long term benefits of investing in the UK.”
Finally… Ross Counsell, Director of Good Move said
“The budget announcement was relatively light on housing news, but it did nonetheless deliver certain pledges for the industry.
Reiterating the manifesto commitment to build 300,000 homes a year, the budget offers a boost to the housing industry and will go a long way to reassuring stakeholders – buyers, sellers and developers – who may have had concerns about the market stability.
Compared to even a few months ago, things are looking much more certain across the country. Since last year’s general election delivered a majority government and the UK finally left the EU, the market is far more stable and this commitment to creating more affordable housing should help to inspire even more confidence.
Following recent news that house prices had risen in all UK regions for the first time in two years, we can now expect this trend to continue. Assuming the Brexit roll-out goes smoothly and there are no further political shockwaves, it is likely that this rise in prices will continue throughout the year, perhaps even reaching an increase of 2 or 3%.
Today’s announcement also revealed the government’s intention to modernise and simplify the planning system. Aiming to improve the capability and performance of Local Planning Authorities (LPAs), if successful, this should make investing in housing easier for developers. While the number of properties for sale has been relatively low in recent years, this renewed confidence in the industry will likely lead to a surge in houses being listed.
Additionally, sellers may have delayed putting their homes on the market until Brexit was decided. Now that the situation has stabilised and house prices are increasing, it is currently a good time for people to sell.
That said, many will be disappointed by the government’s lack of pledges to help first-time buyers. While the budget does denote plans to build more “affordable” homes, measures such as rent controls or the abolition of leasehold properties were not mentioned, suggesting that helping young buyers get on the property ladder is not the main priority of the budget announcement.