The property industry has reacted to Wednesday’s first (and last) Autumn Statement from Chancellor Philip Hammond, which saw a number of announcements on housing, but perhaps not as many as experts had hoped for or expected.
While announcing around £3.7bn of funding for new homes across the country, and confirming his continued support for the Help to Buy shared equity scheme and the Help to Buy ISA saving plan introduced by his predecessor George Osborne, there were a number of topics that did not make Hammond’s schedule.
As the comments made to us in the run-up to the Autumn Statement showed, it was stamp duty (SDLT) that many expected to be one of the Chancellor’s main areas for change, with amendments anticipated to rates for first-time buyers and buy-to-let investors in particular. In the end, Hammond did not even mention the phrase.
Planning regulation and procedures are consistently named by the UK’s housebuilders as being major hurdles to building the number of homes we need at the pace needed, but this subject, too, did not get attention from the Treasury on this occasion.
Many will now be looking to the imminent housing White Paper, the presentation of which “in due course” was confirmed by the Chancellor, to address the issues not covered on 23 November.
Here are comments from across the spectrum of the property industry on the 2016 Autumn Statement:
Funding
Amanda Williams, group development director at Aster Group: “The new £1.4bn fund to support affordable housing options is positive news and the flexibility should further incentivise housebuilders and housing associations to boost the number of units across different tenure types. It is clear that the previous focus solely on traditional ownership no longer works. Alternative tenure types must be seen as a positive and an innovative way of meeting the housing needs of a vast proportion of the country.”
Mark Robinson, Scape Group chief executive: “It’s certainly refreshing to hear the government investing in affordable housing with £1.4bn of funding for 40,000 homes, because housing associations have been under huge funding pressure for many years now, and this move is long overdue. Metro Mayors will get more powers to borrow for infrastructure, but councils are not allowed to borrow to build homes, and so it is disappointing that this hasn’t yet been addressed by the Chancellor.
Parul Scampion, COO of Fruition Properties: “Any help to housebuilders, particularly small to medium-size developers, is to be encouraged but funding schemes need to be kept relatively simple and quick to navigate in order to unlock said resources, otherwise opportunities could be missed.”
Russell Gardner, head of real estate at EY: “Measures to address the UK’s housing supply crisis are welcome, but must represent the start of a major commitment to building significantly more homes across the UK. The headline numbers are eye-catching but it requires a stretch of the imagination to believe that new homes supply can be unlocked for £23,000 each or an affordable house can be built for £35,000. We eagerly await the Housing White Paper and hope it contains more radical structural proposals.”
Paul Gratton, CEO of SDL Group: “Overall, it was positive to see the property market so high on the agenda. We see the announcement of the £2.3bn Housing Infrastructure Fund as a meaningful step towards unblocking the creation of much needed additional housing stock to address the chronic shortage of quality housing that exists in some areas.”
Marc Langdon, Bidwells: “The £1.4bn on affordable housing in England is without doubt beneficial. Affordability is the biggest issue facing the housing market now and in the future and this assistance to local authorities to help with affordable rent, Shared Ownership or Rent to Buy is going to help, but is merely one small step to bridging the gap, which is ever-increasing.”
Alex Newall, managing director at Hanover Private Office: “The Autumn Statement brought underwhelming policies and eye-watering rising debt. £1.4bn for 40,000 new affordable homes equates to only £35,000 budget per property. Low-quality housing which won’t be built to last is on its way!”
Mark Farmer, chief executive of Cast: “It is good to see new housing and infrastructure receiving the focus so desperately needed in the Autumn Statement. It is particularly pleasing to see the increased commitment to the National Affordable Homes Programme, which is a specific recommendation of my recently published government review of the construction market. A tenure-diverse housing market including affordable rent and Shared Ownership is crucial to underpinning more stable long-term demand in construction and also can act as a catalyst for investment in innovation in house building which ultimately will reduce delivery costs.
Stephen Stone, chief executive of Crest Nicholson: “Crest Nicholson welcomes Philip Hammond’s commitment to double annual capital spending on housing. Ultimately this investment should help to make the dream of owning a house a reality for a significant number of people. The investment is another reminder of how the housebuilding industry must pull together and address its growing skills gap in order to continue to deliver quality housing across the UK.”
David Jervis, managing director of Spitfire Bespoke Homes: “The current housing crisis spans all tenures and levels of the market because of a fundamental lack of available homes. The Chancellor’s measures offer some relief to parts of the market but we hope that additional measures in the upcoming White Paper on housing will bring a further and more wholesale boost to the property market. The Chancellor is right to put a focus on affordability and offer support for the provision of affordable housing, as well as measures to assist people towards the goal of homeownership. It will take time for the measures announced to increase supply into the housing market. It is important that the government makes these initiatives as transparent and easily accessible as possible.”
Simon De Friend, joint CEO at Regal Homes: “While today’s announcement of additional funding for housing is welcome, this may not happen quickly. The opportunity to provide immediate and much needed support to the UK housing market has been overlooked.”
Glynis Frew, managing director of Hunters Property plc: “We welcome the Chancellor’s decision to build 40,000 new homes. More stock, if priced correctly, will undoubtedly stabilise markets. Cities such as Manchester, Liverpool and London are crying out for more new build homes, this bubble is creating prices unattainable not only to first time buyers but also second steppers. We have seen price increases of 7% in Manchester alone. Despite this, one must question firstly whether £1.4bn is enough funds to deliver these homes and whether we have the skills available to deliver these.”
Andy Hill, chief executive at Hill: “The new £2.3bn Housing Infrastructure Fund is a win-win for the UK economy and housing market. As part of our five-year growth strategy, we aim to increase the number of homes we complete annually to 2,500 and with the Government’s help in unlocking land, we look forward to seeing this come to fruition in 2020.”
Martin Skinner, CEO Inspired Homes: “Real steps are needeo address the longstanding shortage of homes in the UK and the government has now taken measures to inject some confidence into the industry in order to support the next generation of homeowners. It is vitally important that these new measures quickly filter to homebuilders so we can begin work.”
Jim Holliday, sales and marketing director for Fairview: “As a housebuilder which is committed to providing new homes in areas where there is a real need for them, we welcome yesterday’s announcement of a £2.3bn fund for infrastructure to support residential development. We are always happy to meet our obligations to fund infrastructure which serves our new developments through payments under Section 106 planning agreements, and the government’s pledge will be welcomed by the housebuilding industry.”
Peter Quinn, Lovell director of business development: “The £1.4bn new housing money is extremely good news for Lovell as it will allow 40,000 extra housing starts, we will work with our housing association partners and local authority partners to deliver these. At a time when the public finances are constrained we appreciate that housing is receiving additional funding, yet there remains a housing crisis in the country and this statement is a step towards resolving that.”
Frank Pennal, CEO of the property division of Close Brothers: “Today’s announcement, together with the £3bn Home Builders Fund introduced earlier this year, should help accelerate construction and remove some of the hurdles faced by smaller housebuilders, allowing them to unlock their potential and contribute to vital UK housing development.”
Clynton Nel, residential director at JOHNS&CO: “Housebuilders are not building enough - they never have, missing government targets for many years - so an increased focus on reaching these goals is very encouraging. The introduction of the new £2.3bn Housing Infrastructure Fund, in addition to relaxed restrictions on housing grants to allow for the construction of a wider choice of housing types, will help to loosen the shackles of the building industry.”
Rob Weaver, director of investments at Property Partner: “The severe shortage of affordable housing is a critical threat to UK productivity and digging deeper into Treasury coffers is a welcome step towards resolving the broken market. Targeted funds for affordable homes, and across a 'wider range of housing', shows a sage commitment to service all tenure types – both rental and homeownership.”
John Eastgate, sales and marketing director of OneSavings Bank: “The increased funding set out by Phillip Hammond is certainly a step in the right direction, and we should be optimistic that this marks the beginning, and not the end, of a series of positive changes to housing policy that will stimulate a surge in housebuilding across all tenures.”
Richard Connolly, CEO of Rentplus: “We are delighted that the Government recognises the importance of creating mixed tenure developments providing more homes of every type and addressing the affordability gap. Rent to buy models, like Rentplus, are designed for working families who are just about managing, making a real difference to the quality of their lives now as well as their future aspirations.”
Nick Leeming, chairman at Jackson-Stops & Staff: “It was disappointing that there was no reform to stamp duty, despite industrywide concerns, with our recent research showing a 14% reduction in housing transactions year on year and a £400m shortfall in stamp duty revenue from residential property transactions against predicted revenue this financial year.
Stamp duty
Duncan Walker, managing director of Renaissance Villages: “By failing to address levels of stamp duty, the Chancellor has missed an opportunity to speed up the lengthy chains delaying downsizers selling family homes. This was an opportunity for the Chancellor to introduce an incentive for people buying a family home from a downsizing owner.”
Paul Smith, CEO of haart estate agents: “Starter Homes have apparently disappeared and the government dodged the opportunity to free first-time buyers from the burden of stamp duty. A stamp duty holiday would have provided a boost to the whole economy and got more people onto the property ladder quickly – we could have seen the impact by Christmas.
Liam Bailey, global head of research at Knight Frank: “After a several years of seemingly endless property tax reforms, the absence of new announcements on property taxation today suggest the new Chancellor wants to let existing reforms bed in before opening them up for review. This lack of action leaves unaddressed the drag on market liquidity caused by high stamp duty. The Office for Budget Responsibility’s own data confirms they are expecting further falls in transaction volumes, their new forecast suggests transactions over the next five years will be 230,000 lower than they expected as recently as March this year - the issue of falling market activity is set to become a larger issue and will need addressing.”
Barry Angel, CEO of Albany Homes: “We are extremely disappointed that the concerns surrounding stamp duty were not addressed in today’s Autumn Statement. The stamp duty reforms in April caused a considerable slow-down in transactions in London and this is having a knock on effect. The current stamp duty tax is restricting second steppers and upsizers from moving up the chain and as a result they are not able to make way for first-time buyers.”
Robin Paterson, joint chairman & CEO of United Kingdom Sotheby’s International Realty: “It is disappointing the Chancellor did not take this opportunity to correct the stamp duty woes in the second home market. Osborne suggested these changes in a different climate, one unaffected by the global uncertainty 2016 has seen. At the very least, the Chancellor should have reduced second home stamp duty on buy-to-let properties and kept the rates as they are for those with multiple homes they use as residences. The more the government picks on the landlord the more rental prices will increase and homeownership will continue to decline.”
Nick Leeming, chairman at Jackson-Stops & Staff: “A cut in current prohibitive stamp duty levels would get the market moving at all levels and give welcome relief to first-time buyers, who are having to grapple with a multitude of costs including saving for a deposit. This reform would have resulted in a chain reaction up the housing ladder.”
Russell Quirk, founder and CEO of eMoov.co.uk: “More of a stamp duty refrain rather than a stamp duty reform by Mr Hammond today. Rather than penalise struggling UK buyers the government needs to flip stamp duty on its head and make the seller accountable for paying it. This would help those buyers already paying the price of homeownership, whilst those that have benefited from the appreciating price of their property are in a better position to stomach the sour taste of stamp duty tax.”
Jean-Marc Vandevivere, CEO of PLATFORM_: “Sadly there has been no reversal on the additional stamp duty now levied on corporate investors, which continues to act as a barrier to investment into the UK private rental market. Given the growing demand for private rented housing in Britain, and the government's stated aim of delivering one million homes by 2020, this insistence on levying extra stamp duty on the type of investors who can help deliver high-quality private rented housing at scale seems self-defeating."
Martin Walshe, director, Cheffins Residential Sales: “The decision not to cut this excessive tax rate will mean that the market continues to stagnate, with prices increasing due to a lack of stock on the market. The long and short of it is that the increase to SDLT made by Mr Osborne back in 2014 hasn’t worked and rather has become a vehicle for the government to penalise the smaller housebuilders, parents buying for children, private landlords and those with a home overseas.”
Nick Davies, head of residential development at Stirling Ackroyd: “It seems Starter Homes have been put on the back burner, and the government failed to take decisive action on stamp duty, ducking the opportunity to get the market moving. First-time buyers already find it almost impossible to save for their deposit without the help of relatives and this Autumn Statement has done nothing to cut the cost.”
Michelle Niziol, director of IMS Property Group: “I would have liked to have seen the government reverse the stamp duty changes on second homes which came into force earlier this year. The changes needlessly penalise parents who wish to buy a home for their children so they can get on the property ladder as well as buy-to-let investors who are releasing much needed quality accommodation into the market for the increasing number of renters across the UK.”
Rory O’Neill, head of residential at Carter Jonas: “A reduction in stamp duty costs is the final catalyst that the market needs to boost transactions and we will lobby for this in the Spring Statement. Of course, the top end does not operate in isolation and, if left untended, could create a bottle neck at the entry points sought after by first-time buyers.”
Mark Pollack, director at Aston Chase: “From a London residential property perspective, this has been a largely nondescript Autumn Statement and despite pressure from many informed quarters, Philip Hammond resisted the vociferous calls to relax some of the recently implemented wide ranging onerous cooling measures. Measures that have resulted in a sharp decline in demand in central London, resulting in the value of prime central London property falling by up to 20% in certain instances.”
Help to Buy
Chris Endsor, chief executive of Miller Homes: “Over the last couple of years Help to Buy has been an important stimulus for the market, helping many people realise their dreams of home ownership and the government’s ongoing commitment to this initiative remains important to both homeowners and the industry.”
Steven Cameron, pensions director at Aegon: “With less than five months to go before the intended launch date of the Lifetime ISA, the Chancellor oddly made no reference to it, choosing instead to highlight the Help to Buy ISA it is intended to replace. This may reflect a rebalancing of priorities to promoting savings vehicles which are dedicated to helping first-time buyers get on the housing ladder rather than on a mix of potential savings objectives.”
Andy Hill, chief executive at Hill: “It was positive to hear the Chancellor’s renewed commitment to Help to Buy and we hope to see further support down the road.”
Richard Connolly, CEO of Rentplus: “The extension of the Help to Buy ISA is good to see as this will encourage the nation to get in the saving habit and enable tenants to save to top up the deposit we give them when they buy their home.”
Jim Holliday, sales and marketing director for Fairview: “The Help to Buy equity loan continues to help hard-working people realise their ambitions of home ownership, and we welcome large numbers of visitors to all of our developments who are interested in the scheme – so we wholly support its continuation.”
Planning
Russell Quirk, founder and CEO of eMoov.co.uk: “The government must realise that these announcements are all well and good but it isn’t the funding that is the issue and, until they address the mechanism itself, little will come of it. Where is the land going to come from? How will the planning process be expedited? These are all questions that need answers with actions not just words if the current crisis is to be tackled head on.”
Henry Smith, CEO of Aitch Group: “I welcome Philip Hammond’s announcement that the government will double annual spend on housing as it finally takes action to help address a chronic shortage of homes. However, it is important that the fund can quickly translate into unlocking land through purchases. Unfortunately it is sometimes so difficult to access these funds, that by the time they are available, the opportunity is missed.”
Conrad Payne, partner in national development at Strutt & Parker: “The reality is that without a significant expansion of human and technological resources within local authority planning departments no amount of carrot or stick will facilitate the levels of delivery that the government desires.”