Spring Statement from Chancellor confirms house building targets
With today’s speech from the Chancellor of the Exchequer downgraded from a full Budget to a Spring Statement there was never going to be much in it for the housing market.
But Philip Hammond did reaffirm the Government’s plans to deliver 300,000 homes a year on average by the mid 2020s and also announced 215,000 more homes in the West Midlands.
There will also be more affordable homes in London with the city getting £1.67 billion to start building a further 27,000 affordable homes by the end of 2021/2022.
He also revealed that the stamp duty cut for first time buyers announced in November’s Budget has benefitted over 60,000 property purchasers so far who no longer pay the property tax on homes up to £300,000 and £500,000 in London.
He said that the Government is working with 44 areas on bids into the £4.1 billion Housing Infrastructure Fund to help build new homes and the Housing Growth Partnership, which provides financial support for small house builders, will be more than doubled to £220 million.
‘We’re seeing movements towards the government really dealing with the affordability crisis, though we believe a holistic set of solutions is required to meeting this complex challenge,’ said Simon Heawood, chief executive officer of property investment platform Bricklane.
‘The recent cut to stamp duty and building announcements are welcome for those lucky enough to be able to buy. We would like to see more done to help those saving to get on the ladder, as well as moves to further professionalise the rental market for tenants,’ he added.
Indeed, others in the industry believe that it was a missed opportunity to boost housing even more. Shaun Church, director at mortgage broker Private Finance, had hoped for further cuts in stamp duty for those moving up the housing ladder.
‘With no sign of stamp duty reform for those further up the ladder, the prohibitively high cost of moving is continuing to dampen activity at the upper end of the property market. While this might not seem like a problem for ordinary buyers, a healthy market requires plenty of movement at all rungs of the ladder. A blockage at the top will have a trickledown effect, as those who want to upsize may struggle to find any properties available, which will in turn impact those further down the chain,’ he said.
Rory O’Neill, head of residential at Carter Jonas, also believes that more needs to be done for buyers further along the ladder. ‘We continue to question where the support lies for second steppers, many of whom are desperate to graduate out of their starter home and into a grown-up property,’ he said.
‘They constitute the increasingly squeezed middle class, and we hope that a proportion of the much-needed new homes that Hammond continues to pledge will be adequately sized and ring fenced for these forgotten home owners looking to secure enough space in which to bring up a family,’ he pointed out.
‘The Chancellor has potentially missed a trick in failing to incentivise empty nesters and prospective downsizers, many of whom retain their four and five bedroom homes without filling them, at the expense of the second steppers’ ability to upsize. While the supply of new homes needs to be upped, we also need to better allocate the homes already in existence,’ he added.
Russell Quirk, chief executive officer of hybrid estate agent Emoov, believes that 215,000 homes within the West Midlands region by 2031 will see an already strong area of the UK property market further accelerate where price growth is concerned.
‘Despite uncertainty plaguing the current property landscape, these more affordable regions have seen a sustained level of buyer demand and so this increased investment into the local property market should only see this continue,’ he said.
‘In contrast, London has been one of the worst hit in terms of a dwindling appetite for property amongst buyers. While the commitment of 26,000 affordable homes in the capital and a total of 116,000 affordable homes by 2022 would be a step in the right direction, the government delivered just under 7,000 affordable homes in 2017,’ he added.