Brexit might be completely dominating the headlines at the moment, but there was the small matter of the Chancellor Philip Hammond’s latest Spring Statement – effectively a mini-Budget – taking place on Wednesday 13 March.
It might have gone slightly under the radar this year, but what did this key fiscal event have to say about housing?
Here, using our experience as estate and letting agents operating in Essex, Kent and East London, we take a closer look…
As expected, the main focus of the Spring Statement was on Brexit, with housing not really getting much of a look-in.
Typically, in the lead-up to major fiscal events, there is speculation about major new housing measures or legislation, but this time out everything was very low-key. And this was matched by the Chancellor’s address itself.
The main announcements revolved around outlining how the government’s existing measures had increased home ownership among young people. This included the scrapping of stamp duty for most first-time buyers, which the government says has helped 240,000 people onto the property ladder since first being announced in November 2017. This has helped to restore the number of first-time buyers to above 50% for the ‘first time in a generation’, Hammond added.
Hammond also said housing delivery had surpassed 220,000 additional homes in 2018, the highest number built in all but one of the last 31 years.
To improve things further, the government repeated its autumn 2017 Budget pledge of a five-year, £44 billion housing programme, which aims to help increase housing supply to 300,000 new homes a year by the mid-2020s.
The government also made a number of new announcements, including a £3 billion Affordable Homes Guarantee scheme to support delivery of approximately 30,000 affordable homes and the launch of a £1 billion Enable Build SME guarantee fund.
In addition, there were some announcements on planning and the environment which are set to have an impact on the property industry moving forward. This included new planning guidance to broaden the number of property types on development sites, reforms to allow more change of use between premises and the upwards extension of existing buildings to create new homes, and the Future Homes Standard, which will end fossil fuel heating systems in all new homes from 2025.
The Chancellor’s statement included nothing directly relating to the private rented sector. Some might see that as a relief after the string of announcements in recent years – from the tenant fees ban and the extra 3% stamp duty surcharge to the phasing out of mortgage interest tax relief – but others will be disappointed that Hammond failed to pay any attention to the issues affecting landlords, letting agents and tenants.
Before the Spring Statement, there had been calls, once again, for the Chancellor to overhaul the stamp duty system and offer some respite to private landlords in the form of tax breaks. In particular there had been talk of offering landlords capital gains tax (CGT) incentives to sell to long-term tenants. But none of this came to pass.
There’s no doubt that Brexit uncertainty has had an impact on the property industry, in particular the sales market, with buyers and sellers unsurprisingly taking a wait-and-see approach before committing to any major financial transactions.
While there currently seems no end in sight – with Theresa May’s Brexit deal in limbo and Parliament seemingly in turmoil – if the Prime Minister succeeds in securing an extension from the EU to delay Brexit for a few months (or even longer) that might at least help to provide some clarity and stability in the short-term.
This could, in turn, give a boost to the property market. A smooth and orderly exit from the EU is desired by most, and – if the government is given more time to negotiate and amend the existing withdrawal deal - this kind of exit could be more likely.
There are currently no certainties surrounding Brexit, but decisions made either way would help to increase consumer confidence and bring much-needed stability to a market suffering from the constant uncertainty.
To find out more about how Balgores Property Group can help you to sell, buy, let or rent a home, please contact us at one of our branches.
If you would like to find out how much your home could be worth, or how much you could be earning in rental income, you can check out our free and instant online valuations.