Hunt fails to address housing market in plans for economic growth
Chancellor of the Exchequer Jeremy Hunt failed to address the housing market in his Spring Budget address to the House of Commons today, despite touting economic growth as a priority.
During the speech, Hunt introduced measures to address the rising cost-of-living, such as a fuel duty freeze, and drive economic growth, including identifying 12 Investment Zones in the UK, which will benefit from regional investment over the next five years.
Adam Oldfield, chief revenue officer at Phoebus Software, said: “We were told not to expect a Budget with sweeping changes and unfortunately, as far as the housing market is concerned, that’s exactly what we got.
“There were measures to alleviate the rising cost of living and get more people back into work, which may give a boost to confidence.
“However, it is clear that the growth the government is expecting to see from the measures announced in the budget is not expected to come from the housing market, despite growth being a priority.
“Once again, despite many calls for change, the Chancellor has skipped over stamp duty land tax.
“The antiquated tax is a costly barrier but unfortunately, at over £14bn last year, it contributes far too much to the Treasury’s purse.
“Nonetheless, the housing market is notoriously resilient.
“So perhaps it will be enough that the OBR expects inflation to come down to [2.9%] by the end of the year, while the economy continues to grow, for interest rates to steady and for confidence to return.”
Nick Sanderson, CEO at Audley Group, said: “Another opportunity for housing reform has sailed on by.
“An innovative Chancellor would have used his time at the dispatch box to set out reforms that place as much emphasis on later living as first-time buyers.
“It was unrealistic to expect a stamp duty holiday in the current economic climate, but [Hunt] should have considered stamp duty reform.
In its current guise it’s a brake to the whole market, which in the long term costs the Treasury more.
“If there is no fluidity, people stay in family homes that are too big and unsuitable for them.
“Unsuitable housing leads in turn to more pressure on a stretched NHS compared to a pre-emptive move to a property that can adapt as people age.
“And yet more housing is needed for first-time buyers at a time when there is already a serious deficit.
“In contrast there is a desperate need to increase the provision of age specific housing in the UK, but the sector has been largely ignored by successive chancellors.
“There is little time to waste. The groundwork must start now, if we are to see any benefit in the next few years.”
In his comments following the Budget speech, Labour leader Kier Starmer MP said: “Our economy needed major surgery, but this Budget leaves us stuck in the waiting room with a sticking plaster.”
Tom Mundy, COO of Goodlord, said: “Today’s Budget will have raised eyebrows across the sector. Not because of a controversial policy announcement, but because property and housing were completely overlooked.
“As the nation faces a housing squeeze, rising rents, and a potential exodus of landlords, this critical sector barely got a mention.
“We hope that this isn’t a true reflection of the Government’s priorities. If decision makers overlook housing, tens of millions feel the effects.”
Richard Fearon, chief executive officer at Leeds Building Society, said it was particularly disappointing that Hunt made no commitment to increasing housing supply.
He said: “We welcome this Budget as an effort to return sound economics to the heart of government and provide a plan for growth.
“It is however a missed opportunity to grow the economy by addressing the UK’s home ownership crisis caused by a lack of housing and show support for savers.
“While it is particularly positive to see support for families with young children struggling with the cost of childcare, we know that owning your own home also brings huge economic, education and health benefits.
“With the affordability of home ownership now at its worst point for 150 years it is clear that support for first time buyers must be a key battleground at the next General Election.”