Notable successes included the disaggregation of stamp duty on bulk house purchasing, potential changes to the UK REIT regime, a simplification of the planning system and allowing businesses to lead neighbourhood planning in predominantly business neighbourhoods.
The British Property Federation, which had campaigned for these changes, said that whilst changes to the planning system had been widely expected and trailed ahead of the budget, changes to the way stamp duty is calculated and a potential lowering of the REIT barriers were two pleasant surprises.
Stamp duty has long been cited as an obstacle standing between large institutional investors, such as pension funds, and investment in residential property. If institutions could be attracted in greater number into the residential sector, a significant increase in new homes would result. For example, a fund of £1 billion could see as many as 5,000 new homes built, based on average house prices.
The removal of some of the barriers to entry to the REIT regime should also provide a timely boost to investment in UK property and the REIT sector.
'This is a budget that the property industry will want to get behind. It has a general thread that is supportive of enterprise and a number of issues on which our industry can genuinely feel it is being supported,’ said Liz Peace, chief executive of the BPF.
‘We are particularly pleased that the Government has been willing to engage on issues such as planning reform, REITS and the stamp duty bulk purchase rules. The government has listened to ours’ and others’ representations and you cannot ask for much more than that,’ she explained.
‘Some aspects remain work in progress, such as the use class issue and REIT reform, but I am sure the industry will continue to provide its considered expertise in support of the government’s objectives,’ she added.
The Royal Institution of Chartered Surveyors, which had also been calling for change, said that the bulk purchase rule change is particularly welcome as it will mean that stamp duty is charged on an average price per unit rather than the total transaction cost.
‘More people are now choosing to rent their home, particularly young professionals and those who are looking for flexible accommodation. Changes to REITs and stamp duty will help encourage large investors including pension funds into the sector providing a step change in how rented homes are supplied. Changes to these systems will lead to more high quality properties which are a genuine alternative to owning a home,’ said James Rowlands, global policy and research manager.
He said that the new £250 million package designed to help 10,000 first time buyers to buy a newly built flat or house is a key move as the lack of mortgage lending has significantly reduced the number of homes being bought and sold which in turn has led to low house building levels.
‘Although it would not be a solution to all housing problems this could represent the first step towards a vibrant and sustainable property market and help the economy recover,’ he added.
