The Autumn Budget: What The Promises Mean For The Housing Industry
Last week was a big week for the housing industry. Ahead of the budget the media focussed on the rumours surrounding the property market and what the Chancellor was going to suggest as his solution to the housing crisis.
The announcement didn’t disappoint; there was indeed a large focus on the topic of housing with the key announcements including:
- Abolishing stamp duty for all first-time buyer purchases on houses worth up to £300,000. This will also be the case on the first £300,000 of the purchase price of properties up to £500,000.
- £44billion in capital loans and funding guarantees to help build 300,000 new homes a year on average by the mid-2020s.
- A £630m fund to “unstick” the delivery of 40,000 homes, and a further £2.7bn to more than double the Housing Infrastructure Fund.
- A review into planning laws being launched to “fix the problem” of “land-banking”.
The abolishment of stamp duty for first-time buyer purchases on properties worth up to £300,000, is very good news. This measure gives a helping hand to those looking to buy their first property and overall it is a step in the right direction to encourage fluidity in the property market.
However, this change in Stamp Duty does nothing for existing homeowners in both moving up the ladder and downsizing, as they still face large tax bills. In addition to this, there’s unlikely to be a marked improvement in the buy-to-let market, as the high buy-to-let Stamp Duty levy has not been reduced. This will mean that buying and selling are likely to continue to be quite stagnated.
The promise of investment into the build and delivery of new homes in the budget shows that the government is taking the housing crisis seriously, and this should have a positive impact on the construction industry. However, it is worth noting that shares in house-building companies fell the morning after the announcement.
Elliot Castle, Founder of We Buy Any Home, shares his thoughts on what the budget means for the housing industry:
“At this stage it’s really difficult to predict exactly what impact the budget will have on the housing market. The announcement has certainly shaken things up and all in all it is a step in the right direction. However, whilst more people may well be buying thanks to the cut in stamp duty, there is a group of homeowners that have been ignored. Buy to let landlords for example, who were once previously keeping our market fluid, will continue to be caught up with huge tax bills.
We may well see an increase in buying, but if the selling doesn’t catch up then we’ll continue to have a stagnated property market, with little or no competition between homeowners.”