The property industry responds to the Chancellor's housing announcements in the Autumn Statement

Posted 25 November 2015 by Keith Osborne

Industry professionals react to George Osborne's wide-ranging announcements to build 400,000 new homes in the UK...

Leading figures from the property industry have reacted to the multi-billion pound commitment to 400,000 new homes in Britain over the next five years announced by Chancellor George Osborne in his Autumn Statement.

As expected, the Chancellor has outlined a number of major initiatives, and thrown in a surprise or two. The main pledges are:

  • to double the housing budget to £2bn per year
  • to build 200,000 homes for first-time buyers under the Starter Home Initiative
  • to build 135,000 new homes under a new Help to Buy Shared Ownership scheme with relaxed eligibility criteria
  • to introduce a Help to Buy London scheme to grant equity loans of up to 40% to buyers of new homes in the capital
  • to charge buy-to-let purchasers a stamp duty (SDLT) rate 3% above owner-occupiers (applicable from April 2016), to be re-invested back into local communities

Comments from the industry have been quick to emerge:

Greg Hill, strategy and change management director at WhatHouse? Housebuilder of the Year Hill: “Extra funding for starter homes is great news for prospective homebuyers, and will undoubtedly help to get more first-time buyers and young families on to the housing ladder. Shared Ownership properties too are a great way for young people to buy a home without a large deposit. It is certainly the case that the size of deposit required to buy a home acts as a major barrier to first-time buyers entering the housing market and these initiatives will go some way to addressing the problem.

“However, it still remains that a crucial issue over the coming years will be whether the UK housing industry is structurally able to supply the volume of homes needed to meet government targets. Planning reform, as well as greater investment in skills and training for careers in construction, are essential if the industry is to deliver the extra homes in the timeframes that Britain needs. We have a rapidly ageing workforce, with many tradesmen and skilled professionals due to retire in the next few years – the industry may struggle to deliver these 400,000 new homes if the gap in capacity is not filled.

“If the industry is to build more homes, we also need to ensure that council planning departments have enough resources to make quick decisions on planning applications. The budget cuts that have also been announced today as part of the spending review could have an impact on local authorities’ ability to make decisions quickly.”

Crest Nicholson chief executive Stephen Stone: “Crest Nicholson welcomes George Osborne’s commitment to build 400,000 new homes across England. We continue to see high demand across all of our UK developments, demonstrating that the market is equipped to receive an increased rate of housing delivery. However it is vital that the construction industry as a whole continues to address skills shortages, the key challenge facing our sector over the next five years. At our Work Experience Hub and Site Management Academy, and through our Apprenticeship and Graduate programmes, we are striving to build a highly trained workforce, capable of pushing forward with future growth.”

Nick Sanderson, CEO, Audley Retirement Villages: “Today’s announcement of 400,000 new homes is a mark of the government’s obsession with new builds as the answer to the UK’s housing problem. The policy addresses the symptoms rather than underlying causes of a lack of fluidity in the housing market, most importantly under-occupation. Reports show two in five UK homes are under-occupied, of which half are occupied by those aged 50 to 69. Baby-boomers are finding themselves stuck in unsuitable housing because of the lack of quality accommodation available. The government needs to change their policy to consider the whole market and how to provide a greater, more attractive range of choices for older people that in turn will encourage downsizing and free up huge swathes of much-needed family housing.”

James Poynor, group land and new homes director at Countrywide: “We welcome the Chancellor’s renewed focus on housebuilding and drive to help more people into their home of choice.

“The Chancellor has committed to increased funding for housebuilders, it is vital that particularly small to medium housebuilders are supported in order to encourage them back into the market in order to help meet the Government’s ambitious targets for housing growth. The proposed changes to planning rules are welcome, but with many local authorities still stretched it is vital they are supported further to deliver a sustainable five-year housing plan.

“With current constraints on skilled labour, encouraging more apprenticeships is a good way to ensuring housebuilding is reinforced by the multiple disciplines needed to build more new homes. However, housebuilders must be supported to run their own apprenticeship programmes at a grass roots level and place the right amount of emphasis on hands-on experience and qualifications if we are to truly make housebuilding an aspirational career of choice.”

Kush Rawal, sales and marketing director at Thames Valley Housing: “Thames Valley Housing has long campaigned for more Shared Ownership homes to be made available – we see it as a pragmatic and secure way of getting on the property ladder, particularly in high-value areas where most people cannot afford to buy a home outright. We are constantly looking at ways of improving the Shared Ownership model, for example through our Shared Ownership Plus scheme which makes it simple for people to increase the share of the home they own. We are delighted that the government has committed to a substantial increase in the number of shared ownership homes and look forward to playing our part in the provision of high-quality Shared Ownership housing.”

Peter Rollings, CEO of Marsh & Parsons: “The London housing market is a law unto itself, and it’s encouraging to see the government recognise the added affordability pressures at work in the capital, and tackle these with a designated London Help to Buy scheme. With rumours that interest rates might rise earlier than expected, this will inject renewed confidence and should help thousands of prospective homeowners realise their aspirations of getting on the property ladder. But the government needs to be careful not to put all its eggs in the first-time buyer basket. Its narrow focus on frontloading people onto the property ladder, is causing a lot of drag in the rest of the market, and doing nothing to buoy up sinking supply. Last year’s stamp duty changes have marooned the top-end of the property market – and Osborne has missed a trick by not acknowledging this.

Paul Smith, CEO at haart estate agents: “The announcements around housing by George Osborne in today’s Autumn Statement are certainly a step in the right direction. While many first-time buyers will applaud this initiative to discount starter homes, I fear these properties will still remain largely unaffordable to many, especially in London where the average price of a property is now in excess of £500,000.

“It’s not just the number of starter homes that are in short supply, but also family homes. A stamp duty payment deferral policy for new homes across the next Parliament would encourage more building across all price ranges. We also desperately need initiatives to counter the high cost of moving such as reductions in stamp duty for retirees, allowing them to downsize.”

Phillip Arnold of Phillip Arnold Auctions: "Although the Chancellor is keen to turn 'generation rent' into 'generation buy', this will not be a quick process. It will take years to build the affordable housing required, particularly in cities where there is an acute shortage of suitable and affordable land. It's good to see planning permissions being relaxed to fast-track building but care is needed to ensure new housing stock has a balancing effect on the private rental sector, and makes renting more affordable too. That way, those currently renting may be able to save for a deposit. The Right to Buy ISA may help, but only if the rental market is stabilised too."

Christian Faes, co-founder and CEO of LendInvest, says: Making housebuilding a priority in the Spending Review was a right thing for the Chancellor to do. Schemes like Shared Ownership and Help To Buy are great initiatives to stimulate home purchases. But if the housing stock isn't increased urgently, there'll be nothing to buy. Prices will remain high and anything that does come onto the market will go to landlords who can afford the high gearing. Small-scale developers will be an engine for growth in the housebuilding sector provided their access to finance is supported and more land is unlocked for development. Compared with the major housebuilders whose costs are great and red tape is thick, small developers are faster to build and more flexible for local authorities to work with.

Adam Male of “Until the homes are built and buyers have the keys in their hands and their feet firmly under the table, I believe that many will still be wary about the government’s ability to make much of a difference in today’s choppy property market. With 65% of tenants negative about their property prospects, Mr Osborne has a long way to go in order to change the overall wariness about the ability to succeed in the property market.”

Richard Donnell, Hometrack’s research director: “The Starter Homes scheme, even with its 20% discount, will simply not reach the most unaffordable markets in southern England. Our analysis of the Starter Homes programme shows that 78 local authorities will fall below the maximum value caps for the scheme – these areas account for a fifth of all housing starts nationally in the last year. 57 local authorities in London and the South East will not be viable for starter homes with the balance in the East and South West.

“Shared ownership enfranchises many more households into homeownership.  Our analysis for London shows that shared ownership with a sales value of £435,000 enfranchises 860,000 households into home ownership on incomes of between £50,000 and the £90,000 cap.

“The fundamental problem remains that house prices are being maintained at current unaffordable levels. Buying our way out of the housing crisis is not a viable long-term option – we need to wean the new build market off demand side subsidies and deliver a land market that enables new supply. The devolution and city region policies can deliver the long term answer to the low house building problem.“

Tim Willcocks, chairman of the National Housing Group [an organisation of 25 housising associations]: “Housing associations have a great appetite to continue to develop homes for Shared Ownership and the National Housing Group welcomes the support for this element of the housing market. In particular the ability for the scheme to help not just first-time buyers, but others priced out of their housing market. Members are keen to stress though that Shared Ownership is just a part of their wider housing offer, and will continue to look for ways to develop new homes to meet a wide range of housing needs including affordable rented homes.”

Lora Roberts, portfolio manager at Ascend Properties: “We have already seen a huge surge in interest for property in the north but it is imperative that that the infrastructure network is now bulked up to cope with the increased demand.”

Graham Davidson, managing director of Sequre Property Investment: “The Chancellor has made his position explicitly clear; we are here to build homes and the North in particular is here to do business. The Northern economy is already gathering pace and the confirmation of investment in HS2 and HS3, creating better links between London, Manchester and other key Northern cities will ensure that the new homes and businesses in these areas are properly serviced.

“We welcome the announcement of investment in starter homes, which will help boost activity across all levels of the market, but this is the third time that this phrase has been mentioned and time will tell if it comes to fruition, as we know that developers are already facing a critical skills and materials shortage. We await to see the final details, including the thresholds, of the new 3% stamp duty on second homes and buy-to-let properties.”

Daniel Hynd, managing director of Promenade Estates: “The news that the government will focus on housing and commit to building 400,000 new homes across England will no doubt help the ‘homeownership crisis’ in some way. While building future homes is important, addressing the needs of renters should also be on the government’s agenda. While some turn to renting because they can’t afford a deposit, many rent as a lifestyle choice. It’s important that the government and developers adapt to these evolving models of homeownership.”

Rob Clifford, executive director at property services provider, Shepherd Direct (Moneyquest/CENTURY 21 UK): "As with all these schemes and announcements, the proof of the pudding will be in the eating, and if these targets can be achieved then the UK housing market will be going some way to filling the gap that exists. Increasing supply remains key if we are going to have a UK housing market fit for purpose and therefore I suspect this type of commitment will need to be grown and developed over the years ahead if we are going to keep up with demand."

Steve Sanham, development director at HUB Residential: "With the government promising to subsidise homeownership for the masses, the Chancellor has effectively admitted that it can’t get the housing market under control. It appears that the housing policies of the past few decades have been an utter failure. The problem hasn't been a lack of ‘affordable housing’, rather a lack of affordability in general. Investment in infrastructure to bring new areas on line for development, and freeing up the bureaucracy of the planning system, are the only ways to bring ‘market homes’ within the reach of first-time buyers. New headline grabbing affordable housing initiatives smack of more short-termism, and an inability or unwillingness of the government to grasp the big issues."

John Elliott, managing director at luxury housebuilder Millwood Designer Homes: “We welcome the Right-to-Buy pilot scheme. Britain is still a nation of homeowners and it is good to see measures to help more people’s dream of owning a home become reality.

“Help to Buy has been a very effective tool in the market and it is good to hear that more homes will be built with this purpose in mind, particularly in London. However, the government needs to continue to keep a close watch on this. The potential for more help in the Shared Ownership market is also extremely welcome and continues to stimulate the overall building of new homes and homeownership.

“Overall, we need an even approach to housing with a smooth transactional process the whole way along – we need the entire chain working together. This way the industry can eventually resolve the spiralling price crisis.”

Henry Woodcock, principal mortgage consultant, IRESS: “The housing market has been crying out for more housebuilding for years in order to boost what is an ever-squeezed supply. It is this lack of supply and growing buyer demand which has pushed up house prices, making it even more difficult for first time buyers to take that first step onto the ladder. Today’s announcement is a welcome step towards alleviating this issue however this must be seen as the first and not the last step towards creating a more sustainable housing market.”

Nicholas Leeming, chairman of national estate agents Jackson-Stops & Staff: “George Osborne’s  pledge to tackle a ‘crisis’ in homeownership today, by doubling the housing budget, is excellent news for the UK market. There has been a devastating lack of supply across the UK for many years while home ownership has been falling as many families have not been able to afford their own home. 400,000 new homes will be built and it is refreshing to see government’s commitment to providing housing for all UK residents, including first-time buyers with new starter homes and the launch of the London Help to Buy scheme.

“However, I think George Osborne has missed a trick in not reducing the rate of Stamp Duty for the highest value homes. The £1.4m+ market has been hit extremely hard as buyers have changed their habits over the past year - those looking to move up the ladder were not prepared to pay a six- or seven-figure tax bill, while overseas investors have also been deliberating over whether to buy. The Chancellor could have provided major boost to this sector’s liquidity today by reducing the excessive stamp duty charges on higher-valued properties and so encourage more activity in the top end of the market.”

Charles Mills, head of planning at Daniel Watney: "We have seen some good progress by this government, with housing topping the agenda in a way not seen in decades. The recently announced review of planning fees is positive – provided a rise results in a better service. The government is also right to push the public sector to open its estate up for development, and to focus on delivering more high-density housing in key locations. But what the government has yet to recognise is that its 'devolution revolution' in some cases is actually harming housing delivery. Local and Neighbourhood Plans are increasingly being used to stop rather than enable development. Centrally-mandated house building targets, based on local housing need, may be the only way forward.”

Jeremy Leaf, former RICS chairman and north London estate agent: "In hiking stamp duty on buy-to-let, Osborne is trying to level the playing field further but in aiming for political expedience he is demonstrating practical naivety. Many buy-to-let investors underpin some of the bigger developments in particular. There is a danger that it will kill the market and result in some developments not happening at all. 

"Any measures that help first-time buyers are good for the whole housing market. Help to Buy is helpful for those who can’t raise much of a deposit and there is definitely more interest in such schemes but it is a question of delivery. It is taking too long to build flats and houses and get them onto the market. 400,000 new homes is encouraging but we have yet to see the detail - where will they be built, when will they be built and how? Do we have the capacity to deliver the necessary labour and materials? The devil will be very much in the detail.

Jamie Lester, Haus Properties: “The new 3% increase in stamp duty for buy-to-let properties and second homes, while good for first-time buyers, could actually have quite a negative impact on buy-to-let investors and subsequently, the rental market. This may ultimately lead to a shortage of good quality properties or an increase in rent, which could make it much more difficult for tenants.”

Ed Mead, executive director at Douglas & Gordon: “It seems odd that in his political attempt to favour locals vs second home buyers and first-time buyers vs buy-to-let landlords, the Chancellor thinks that difference is represented by a mere 3%, the extra amount of SDLT due to be levied from April on second homes and BTL landlords. Restricting the supply of property into the PRS, the biggest rental sector, risks limiting choice. Breaks for build-to-let by larger investors and a smart new way of managing assured short hold tenancies are what are required, not yet more suppression of demand.

“The London Help to Buy will go somewhat to help satisfy the huge supply of new homes coming up in the capital so was a welcome addition as is the relaxation of Shared Ownership rules.”

Kim Vernau, chief executive officer, BLP Insurance: “The Chancellor’s Autumn Statement offers great promise for housebuilders and potential homeowners. Almost £7bn has been designated to help tackle the current housing crisis, with most of the finances put aside to help working families and individuals buy homes, through grants for Shared Ownership properties.

“Doubling the affordable housing budget when the government is cutting back across departments, sends a signal that the government is taking serious steps to fulfil their promise to address the housing shortage. Demand for affordable property has been at extremely high levels for some time now. We will need to wait to see the impact this will have on private renters who are burdened with high rents due to the lack of affordable houses on the market.

“Challenges remain which require longer-term solutions including addressing the current skills gap and resolving the delays presented by the current planning processes. These challenges are significant and, in the absence of solutions, will continue to have an adverse impact on the speed with which new homes are built.”

Russell Quirk, founder and CEO of Osborne’s big news today was the announcement that the government “choose to build” and will double the housing budget to £2bn and reform the housing system, pumping £7bn into building 400,000 more affordable homes, coined as ‘the biggest affordable housebuilding programme since the 1970s’. Great news for those in desperate need of affordable housing, however when this talk amounts to little else than rhetoric, as it so often does, it will come as little comfort to the British public.

Martin Robinson, director of sales at Hunters Property Group: “We welcome the Chancellor’s decision to double the housing budget and to build 400,000 new homes across England, this can only mean good things for the UK’s housing market and the economy as a whole. Homeownership is a key aspiration for the British public and making this ambition more achievable for more people boosts morale which undeniably drives the housing market and will create churn.

“However, the question of who will build these homes has to be asked. We are consistently hearing that developers do not have the materials, time or skills needed to build homes at the rate the government is demanding. What’s more, will there be a plan in place to subsidise these builders who will undoubtedly be building these homes without the usual margin.”

Nick Marr, co-founder “TheHouseShop have championed accessible property and the needs of the disabled community for over a decade now, and we are incredibly pleased to see this sector of the market receiving the attention it deserves. George Osborne's announcement of a £400m spending pledge to build 8,000 new specialist homes is certainly encouraging, but given that as of 2014 the government's own figures showed a shortage of roughly 700,000 accessible homes, much more will be needed to establish a housing market that truly works for everyone.”

“While the creation of new specialist homes is a valuable and welcome announcement, we will need a more comprehensive approach to accessibility and a plan for existing housing stock as well as new build homes.”

Robin Paterson, chairman, United Kingdom Sotheby’s International Realty: “George Osborne has pledged £7bn to tackle homeownership issues in this country, but it is a shame he did not do more for all aspects of the UK market in today’s Autumn Statement. The additional 3% stamp duty on second homes is a fair way of raising funds however, by not altering excessive stamp duty levies that must be paid on top-tier UK homes, he has missed an opportunity to provide a major boost to the property market and encourage top-end activity.

I feel that this is short-sighted by the Government as they have failed to address the slowdown at the top-end of the market and an increase in activity would have inevitably boosted Treasury receipts. The Chancellor could have put new, fairer stamp duty levels in place as so many London family homes, even in secondary areas, breach the £1.5m+ barrier. The six- or seven-figure tax bills being paid for the highest value homes seems out of proportion with the government’s other housing policies, which encourage activity.”

Greg Ketteridge, managing director Careys New Homes: “Re planning reforms, unfortunately we have heard this so many times before and it comes to nothing or very little. We are delighted that Help to Buy is to remain with extra funds available. Help to Buy in London sounds interesting with a 40% interest-free loan, and we look forward to seeing the detail, but the 5% deposit continues to be a problem for young buyers, especially in London. If the buy-to-let stamp duty change is what they are going to do, the government should not have given everyone notice, as it could cause a rush to get in before the deadline, as the old stamp duty increase did years ago. We are very disappointed that the government continues with Right to Buy from housing associations without a plan to replace the stock that they will lose.

Mat Lown, partner and head of sustainability, Tuffin Ferraby Taylor, property and construction consultants: “What is lacking today is government leadership for our sector to push on and make the changes necessary to our buildings. It is bewildering to see more time being spent on ‘energy innovation’ when it’s absolutely clear what needs to be done to buildings to improve their energy efficiency. More amber lights would seem to indicate more procrastination.

“The Green Deal has been neatly removed from the Chancellor’s lexicon with no successor in place. And we will be watching very carefully to see if the proposed cuts at the Department of Energy and Climate Change impact upon the delivery of measures designed to improve energy security, reduce energy consumption and deal with carbon emissions. This a tall order for a government department under financial siege.

Peter Tooher, director at Nexus Planning: “George  'the builder' continues to see housebuilding as a key driver and the review marks a clear shift away from affordable to rent to affordable to buy. It will be interesting to see how the continued possibility of a full-scale extension of Right to Buy will affect housebuilding in that sector and whether the increasingly self-financing local authorities can step up and continue to play their part in planned housing growth. The emphasis on affordable to buy will, subject to the detail in the Housing Bill, be welcomed by the home building industry - a lot of Section 106 agreements will be revisited in the months ahead.”

Stuart Law, CEO at Assetz for Investors: “It is foolish to see the announcement of the London Help to Buy scheme with 40% interest-free loans, as this creates further upward price pressure on the capital when in fact subsidies should be being removed, not added to this location. When the price reversal comes in London this will leave many in negative equity as a direct result of this policy and having to take on even more debt as a result of the further upward impetus on prices this policy will have in London. It is time for investors to leave the capital and invest in safer locations around the UK.

“Secondly with the announcement of the new 3% stamp duty premium for buy-to-let purchases from April next year, buy-to-let investors have been robbed a second time (following the new ‘tenant tax’ or tax on buy-to-let mortgage interest payments for higher-rate tax payers) yet are providing something invaluable; homes for rent when saving for a deposit and homeownership is increasingly out of reach of many. The buy-to-let investor should not be blamed for house price rises, rather, this is down to the chronic shortage of housebuilding in this country which is compounded by population growth. We would therefore advise caution against penalising this group of investors when actually other policy areas hold the key to unlock the solution.”

Rishi Passi, CEO, Oblix Capital: “The UK housing market has been struggling with a chronic supply shortage for years now, artificially inflating prices and pushing homeownership out of reach for many first-time buyers, so it comes as a huge relief to see the Chancellor finally put housebuilding policy front and centre of his Autumn Statement. His life-raft for first-time buyers includes a proposed injection of £2.3bn of investment for developers building 200,000 ‘starter homes’, with £4bn earmarked to promote the development of 135,000 Shared Ownership homes. The detail of how this money will reach developers is yet to be seen, nevertheless this will boost supply and go a long way to moderate the rapid growth of house prices.

“A 3% increase in stamp duty for buy to let landlords will prove something of a sting in the tail for developers, and pour water on a private rented market that has been gaining ground in recent years, but overall the Autumn Statement has been a step in the right direction for addressing the most pressing problem points in the UK housing market.”

James Wyatt, partner of Surrey-based estate agency, Barton Wyatt: "The silence in my office is deafening. 3% extra stamp duty on second homes and buy-to-let purchases further reinforces that this Government does not understand the housing market well enough. The small amount of money over a long period of time for new housing doesn’t cut the mustard. The imbalance in the housing market will only increase further and further, with taxes at the top and bottom end of the market way out of kilter. Property over £2m will struggle and the owners – largely Conservative supporters – will not thank the government.”

Sara Parker, sales director for Barratt Homes Exeter: “These latest measures are set to make it even easier for people in the South West to get onto the housing ladder. Coupled with the announcement of the new Help to Buy ISA and low interest and mortgage rates, it seems 2016 is looking bright for those looking to buy their first home.”

Alex Gosling, CEO, online estate agents "Ouch. That's another blow for landlords, so soon after the cut in mortgage interest tax relief. In the space of two announcements, George Osborne has become Enemy No1 for the buy-to-let sector. We are likely to see a stampede over the next year to purchase buy-to-let properties before the stamp duty hike comes into force. But the future is now decidedly uncertain for the UK's buy-to-let sector. It seems like the Government has forgotten, or just ignored, the large number of amateur buy-to-let landlords who aren't looking to make vast fortunes, but are just looking to supplement their incomes. We are not talking about the professional landlords with multiple properties. We are talking about the pensioners, for example, who have invested in buy-to-let to boost their pensions, because low interest rates have decimated their savings income. Hopefully, this hasn't sounded the death knell for buy-to-let."

Jonathan Hopper, managing director, buying agents Garrington Property Finders: The Chancellor's housing plans addressed the dire housing shortage we have in this country, but they focused on tomorrow's solution rather than fixing today's problems. The government's housing policy can't just be about building more homes, it needs to address the here and now. And right now the housing market isn't moving. We need measures to stimulate the housing market today, to encourage people to move. It's disappointing that George Osborne failed to deliver any solutions to the current issues facing the housing market right now."

Andrew Ellinas, director of Sandfords, a central and north-west London agent; “The planned increase in starter homes for first-time buyers will energise the whole of the housing market. Increasing affordable housing, particularly in the capital with the launch of a London Help to Buy scheme, will be good news for the industry. The positivity of helping more first-time buyers to finally get onto the property ladder in London will ricochet into all sectors of the market, and all regions.

However, George Osborne has produced a double-edged sword with this Autumn Statement because of his new rates of stamp duty coming into play in April 2016. Introducing a 3% stamp duty penalty on buy-to-let properties and second homes will be very detrimental to the whole of the market and will in fact deter investment, and over time deplete available rental stock. Although we await full details on this, for London in particular, considering it’s one of the worlds investment ‘safe havens’, this is an unfair taxation for Mr Osborne to put in place and will come as another blow for buy-to-let landlords.”

Dave Sheridan, chief executive at Keepmoat: “We welcome the drive to build many more homes that people can afford. Now is the time for the sector to step up and do more to resolve the housing crisis. Our partnerships with councils and HAs create thousands of starter and affordable homes every year and we are working on plans to do even more.”

Louisa Brodie, head of search and acquisitions, Banda Property: “There’s been a stand-off between vendors and buyers since last year’s across the board increases to SDLT, which has driven the central London market to a stalemate situation as vendors stubbornly hold out for prices of 18 months ago. News today of a further stamp duty increase of 3% for investors may hopefully end this stand off, with vendors finally having to accept that they need to be more realistic and swallow a share of the increased buying costs by adjusting their prices. Investors have been hit twice now, with the loss of tax relief on mortgage interest payments and now higher stamp duty, but I’m confident that significant numbers will still be seeking a long-term home for their cash in London. Come the spring, I am hopeful we will see a rise in transactions across prime central London.“

Mark Parkinson, director at Middleton Advisors: “In theory, the commitment to record housebuilding, coupled with further relaxation of planning laws, should help alleviate the housing shortage, however measures announced in previous budgets have not managed to have a significant impact. Many in the London and south of England property market had hoped in vain for a ‘soothing pill’ to ease the pain of last year’s stamp duty hikes; however, the Chancellor appears to have gone the other way, increasing stamp duty on second homes and buy-to-lets by 3% from next April. The detail is yet to be published, but if the effect of the last stamp duty rise is anything to go by, there will be a rush of second home buyers and buy-to-let purchasers trying to close a deal before next April. Obviously this means the top rate stamp duty for someone buying a large weekend or holiday home rises to an eye-watering 15%.

Alex Newall, managing director at Hanover Private Office: “This move is one of the most major housebuilding initiatives since the 1970s and there will be wide spread opportunity for families to buy their own homes resulting in demand which eventually will be met with supply. There will be a 3% increase in stamp duty for buy-to-let properties and second homes, effective from next year. Corporate property development won't be affected, so new investors will need careful structuring and advice, and we could see single investors using this time to acquire now and hold. Existing single landlords will most likely hold, rather than sell, meaning less stock on the market. Overall, we’ll see more regional growth and more homes being bought at the lower levels of the market, providing an even stronger base for the UK housing market.”  

Richard Bernstone, director at Aston Chase: Council tax to be increased by 2%? While I guess we will all live with that one, [it is] hardly value for money, and in truth a complete swerve on what is actually ‘fairly’ required, which is a complete review of council tax bands to see higher value houses paying higher council tax  than lower value apartments.

As for the ‘additional’ 3% SDLT on second homes and/or buy-to-lets…it is simply the antithesis of what we should be expecting from a Tory government, whose values of homeownership and rewarding the most hardworking are beginning to sound hollow. The promises of more affordable homes to buy and the incentive schemes for first-times buyers are always welcome and I just hope that the government will meet its targets in this respect.”

Charles Curran, principal at Maskells Estate Agents: “The additional 3% stamp duty to buy-to-let homes and second homes is an interesting move.  We will need to see the detail from HMRC before making our final analysis but our initial thoughts are: firstly for second homes, if you are in a civil partnership or married, it is easy enough to buy a second property in the spouse or partner’s name.  For example, if you spend the week in London and your spouse in the country, each property could be argued as being your primary residence.  Overseas buyers will now be indifferent if they buy into a SPV or Trust versus buying it individually as the Stamp Duty payable is the same as the Additional Stamp Duty.  The upside of buying into a ‘structure’ is that it allows you to better plan for IHT and the financing of the asset the downside is the annual charge.

For the buy-to-let market, our initial reaction is that the additional income tax payable under the proposed changes currently in consultation, were largely very unpopular.  We understand that on this basis, representations have been made to the Exchequer by lawyers and accountants. Property companies (we need to see the fine print) may be excluded, so has the Chancellor provided an opportunity where landlords may consider buy-to-let companies where taxes may be paid on EBIT rather than on turnover (subject to close company rules)?

However, it does seem rather short-sighted to continue to tinker with the one asset class that represents the largest single asset in terms of value an individual may own, and whose sense of confidence in the economy hinges on that value.

Rob Charlton CEO of _space group architecture: The increase in spending on housing is welcomed, the plan being to deliver 400,000 affordable homes by 2020. There doesn't seem to be any detail as to how this will be achieved however his focus is on homeownership rather than rental. This would suggest that this programme will be delivered by volume housebuilders. He has also continued with the right to buy for housing association tenants - I still fail to see the logic in this policy.

Scala (Network Homes)
3 August 2017
The team takes a look around the UK at this week's range of new homes launches, events and offers...Read more
Today's New Homes
Martin Bikhit, Kay & Co.
27 July 2017 speaks to experienced London estate agent Martin Bikhit on buying and investing in new homes in London...Read more
Interviews with the Experts
Adam Joseph, The Happy Tenant Company
29 June 2017
An exclusive chat with the chief of a company that provides management services for buy-to-let investors to meet the expectations of their tenant...Read more
Interviews with the Experts

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