Despite widespread market speculation, many property professionals have been left disappointed, as the Chancellor’s Spring Budget contained little support for the struggling property market.
As many anticipated major Stamp Duty reform, further support for first-time buyers and the possible launch of 99% mortgages, Hunt’s Budget bypassed several major issues facing the housing market, and instead focused on adjustments to various forms of property tax.
Ushering in the abolishment of the furnished holiday letting regime to increase housing stock in the private rented sector (PRS), as well as the removal of Multiple Dwellings Relief, the Chancellor also pledged to deliver more than one million new homes over the current Parliamentary period.
In addition, the Chancellor reduced the higher rate of property Capital Gains Tax (CGT) from 28% to 24%, following analysis from both the Treasury and the OBR
However, as struggles with affordability continue to ravage both the residential and buy-to-let (BTL) sector, and as lenders continue to raise rates in response to the current economic environment – professionals have condemned the Budget as a “missed opportunity” to provide much-needed support for mortgage holders.
Richard Donnell, executive director at Zoopla, said: “The Budget marks another missed opportunity to take action on boosting supply and mortgage availability in the housing market.
“The consensus is that the country needs more new homes. Supply has increased but this has stalled.
“There is a need for widespread reform of the planning system to encourage supply.
“More funding is needed for social and affordable homes, and housing infrastructure investment to unlock supply.
“The Government should also look to support the emergence of a long-term fixed rate mortgage market as a matter of urgency.
“This will help more young people with smaller deposits access home ownership – particularly in southern England where deposit size is the biggest barrier to getting on the housing ladder.”
“Another missed opportunity is the decision not to make the £625,000 threshold for first-time buyer relief permanent.
“This means 30% more first-time buyers will be liable to pay full stamp duty from March next year.”
James Tucker, CEO of Twenty7tec, agreed, citing his disappointment in the lack of support for mortgage holders.
He said: “Not one single mention of mortgages in today’s Budget.
“A small amount of tinkering in the housing market on social housing SDLT relief, lowering of higher capital gains tax from 28% to 24%, but otherwise, not much.”
Tucker added: “The housing sector has long underpinned the UK’s economic success, so to see no reference to how to get the first-time buyer part of the market fully functioning (it’s currently at a four year low) was more than a little disappointing.”
Describing the Budget as a “token effort”, Adam Oldfield, chief revenue officer at Phoebus Software, described the Budget as “underwhelming” for the housing market.
He said “That was a most underwhelming Budget announcement for the housing market, particularly considering it is election year.
“At least this time round Stamp Duty got a mention, albeit a fairly token effort when you consider the echoing calls for bona fide Stamp Duty reform.
“Had the Chancellor decided to cut Stamp Duty for all buyers, from first-timers to next-timers to down-sizers, that could have been a real boost across the residential housing market.”
