This morning saw Chancellor Jeremy Hunt unveil his Autumn budget before the House of Commons.
Following eight weeks of political and economic turmoil, Hunt (under the new premiership of PM Rishi Sunak), vowed to “tackle the cost-of-living crisis and rebuild the economy”.
Focused on “stability, growth and public services”, Hunt set out a rather bleak autumn statement, implementing substantial tax hikes in order to plug the UK’s fiscal ‘black hole’.
Hunt also pledged to extend Stamp Duty cuts until 2025, in an effort to support homebuyers and a struggling property market, as well as safeguarding the pension ‘triple lock’.
In response to this monumental budget, here’s what the industry professionals had to say:
Reaction
Emma Hollingworth, managing director of Mortgages at MPowered Mortgages:
“The Chancellor’s decision to extend SDLT cuts until 2025 is a very welcome measure that will bring a degree of continuity, stability and security to a market that continues to be at the whim of wider economic volatility.
“This will give those looking to buy a home time to consider their options and, with brokers’ support, to make the best decision for them, knowing that they can do not have to rush in order to benefit from the cuts.
“Importantly, today’s announcement offers homebuyers, brokers, and lenders alike a degree of confidence by providing a longer-term view – something that has been markedly absent from the housing market for some time now.
“Even though the tax break will only last until 2025, it’s a welcome move by the Government as we move through this difficult period for homebuyers and the housing market.”
Scott Clay, head of introducers at Together:
“The Chancellor gave fair warning in the setup of today’s Autumn statement: difficult decisions to keep mortgage rates down were clearly touted with promises of the Government and bank working in lock step to fight inflation and avoid spiralling interest rates.
“However, with the OBR expecting housing activity to slow significantly next year; the decision to ‘sunset’ stamp duty cuts in March 2025 in a bid to jumpstart the market is short-sighted.
“While this will likely force first-time buyers and those looking to move house to jump before they’re pushed and missed out on a good deal; there are swathes of potential homeowners who have been overlooked by this decision.
“Our research shows there are swathes of potential borrowers, much of which who are considered non-standard by the mainstream market who are at real risk of being shut out altogether.
“While strong measures are needed to save our flailing economy, famine always follows feast.”
Andrew Gething, managing director of MorganAsh:
“The Chancellor made it very clear in advance that his statement will lead to ‘all of us’ paying more tax.
“That is certainly the case as the measures mean the tax burden on households could be at its highest for 70 years.
“Even if salaries do go up, the Chancellor’s freezing of income tax and national insurance thresholds will see an increase in the proportion of earnings paid to the taxman.
“But even with confirmation of benefits rising in line with inflation, safeguarding the pension ‘triple lock’ and offering further cost-of-living payments, there’s no question many households will see a significant fall in disposable income.
“This challenging environment will undoubtedly see more people bearing the full force of the cost-of-living crisis and push more into the ‘vulnerable’ category.
“As a result, monitoring customer vulnerability must now move higher up the agenda for all financial services firms.
“This is especially true with the arrival of Consumer Duty in July ensuring lenders, providers, brokers and IFAs are all duty bound to prevent foreseeable harm and deliver good outcomes for customers.”
Bradley Post, CEO of RIFT Tax Refunds:
“A substantial hike in taxes in an attempt to plug the fiscal ‘black hole’ that is supposedly threatening to swallow the nation.
“While the average person has escaped relatively unscathed with respect to their day-to-day earnings, changes to capital gains tax allowances will certainly hurt those due to benefit from longer term, strategic investments, perhaps most notably the nation’s landlords.
“We’ve never been squeezed harder where tax contributions are concerned and the Chancellor needs to be cautious here, as he risks pushing our economy from inflation mitigation into a long and deep recession.”
Iain Crawford, CEO of Alliance Fund:
“Today’s budget can very much be viewed as an attempt to restore stability and get a handle on record inflation levels following the previously disastrous attempts by Truss and Kwarteng.
“Short term pain for long term gain is no bad thing and while we’ve seen a huge hike in taxation costs to some, it can be argued that those due to be hit hardest are in the best position to stomach these increases.
“Where initiatives directly concerning the residential property market are concerned, it’s unfortunately a case of nothing to see here, other than the rub being pulled from beneath homebuyers with the removal of the stamp duty reprieve come April 2025.”
Marc von Grundherr, director of Benham and Reeves:
“Homebuyers have been stretched to breaking point in recent weeks, not only by the rising cost-of-living, but also due to increasing mortgage costs.
“So they may well feel that they’ve been shown the cold shoulder today with the absence of any meaningful initiative designed to help stimulate the UK property market.
“Even more so given that the previous reprieve offered in the way of a stamp duty cut will now only run until the end of March 2025.
“At the same time, Jeremy Hunt’s raid on middle England and landlords, in particular, by slashing the amount exempt in capital gains tax is likely to disconnect this Government even further from their traditional electoral base.
“It’s a risky strategy and one that confirms that the Conservatives are no longer the party of the UK homeowner, which is sure to lose them votes further down the line.”
James Forrester, managing director of Barrows and Forrester:
“The property market has remained largely defiant despite the turbulence of recent weeks and so it’s no surprise that the nation’s homebuyers and sellers have been ignored this time around, although today can be viewed as a golden opportunity missed to push growth within the sector.
“That said, the Government seems intent on taxing until the pip squeaks and this is only going to add to the woes of many ordinary folk, as they continue to struggle in keeping their heads above water where their household finances are concerned.
“The only silver lining is that many of today’s announcements don’t kick in for a while and this lot may not still be in Government by then.
“We can expect the nation’s tenants to feel the brunt, as yet another Government initiative designed to deter landlords, this time in the form of a capital gains tax raid, reduces the level of stock available and drives up rental values.”
Chris Hodgkinson, managing director of House Buyer Bureau:
“A bleak budget for the nation, as the Government ramps up taxes while we stare down the barrel of a 41 year high in inflation.
“As a result, we can expect the Bank of England to act with a further hike to interest rates in the immediate future and this will put even greater strain on our household finances.
“As it does, we can expect the property market to suffer as buyers can no longer afford to purchase at previous price thresholds, bringing house prices down in the process.
“With changes to capital gains tax we can also expect an influx of stock from hard pressed landlords, who have grown weary of the Government’s consistent attacks on their profit margins and are looking to off load their buy to let portfolios.
“In doing so, this additional stock will also help balance the scale of supply and demand, contributing further to a muted housing market.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman:
“As with all these financial statements, sometimes it’s as much what the Chancellor doesn’t say as what he does, with the full implications becoming apparent at a later date.
“On the face of it, the Chancellor appears to have done very little to compromise the property market and number of transactions, which is good news.
“Of course, there will be less money in people’s pockets when it comes to buying property and worries about rising interest rates will remain.
“There may be an issue for larger development projects where investors and builders will be thinking about longer-term implications for the stamp duty changes which are scheduled for March 2025.
“The capital gains tax changes are disappointing as they could have a significant impact on the rental sector.
“The fact is that we need landlords; everyone knows rents are too high and there are not enough affordable homes to sell or for rent.
“We want to encourage landlords to stay in the sector and new ones to enter the market, reducing the upwards pressure on rents and stemming the flow of departure.
“Hopefully, landlords won’t sell now before this measure is introduced, as that will be bad not only for the rental market but the sales market too, as it will increase supply in the latter, reducing property prices more rapidly and therefore undermining confidence.
“If properties flood the market as a result, it won’t be good for sales or lettings.”
Les Pick, director of manufacturing and adviser propositions at more2life:
“With nine out of 10 over-65s receiving some form of state pension, the Chancellor’s decision to keep the triple lock is likely to come as a real relief – especially as many are already finding that inflation on utilities as well as groceries is hard to manage.
“That said, the Government’s decision to raise more funding from inheritance tax, coupled with the other changes in the budget including stamp duty changes in 2025 and the alarming cost-of-living crisis, is going to leave many reassessing the best financial options for themselves as well as their families.
“This is where specialist advisers can really step up and help people to manage their finances to provide the best outcomes for their individual situations.
“Whether the best choice is downsizing, retirement interest-only mortgages, accessing a pension pot or choosing equity release, older customers need to understand that retirement is not linear, and they do have more options than they previously considered.
“In the equity release sector, products not only have safeguards such as the no-negative equity guarantee but now have more flexibilities than ever before whether they want to manage their borrowing with repayments or how they access their funds using drawdown.
“Advisers have a significant role to play and more2life will remain focused on helping them to serve their customers by providing an innovation range of tools and support that make the process as simple as possible.”
Richard Campo, founder of Rose Capital Partners:
“Putting a deadline on the Stamp Duty changes is a really bad idea.
“The only good thing that came of the infamous mini budget was that the stamp duty allowance wasn’t time limited.
“What ALWAYS HAPPENS when you create a deadline?
“It creates a rush to hit the deadline which pushes up prices artificially, and also, what comes next? Going back to the current scheme or not?
“That wasn’t mentioned so the devil will be in the detail here.”
“Cutting the dividend rate is another insult to self-employed people who take additional risks to employees, but one of the few benefits of lower taxes is being eroded.
“Self-employed people disproportionately create more wealth and jobs than any other sector, so hitting them with more tax simply erodes their ability to do so in the future.”
Brian Murphy, head of lending at Mortgage Advice Bureau:
“It’s heartening to see the Government devote a further £6 billion to insulating the UK’s ageing housing stock, as the net zero deadline of 2050 starts loom closer.
“The responsibility of solving energy efficiency in our homes is yet to be fully claimed, and while it may be a joint effort between homeowners, lenders, councils and the Government, it’s good to see some solid investment promised – better insulated homes also mean lower bills and will go some way to solving the cost-of-living crisis.
“What will be interesting to note is how easy the Government makes it for homeowners to apply for Government support to improve the efficiency of their homes – previous green home initiatives have seen poor take-up or been abandoned completely.”
John Phillips, national operations director of Just Mortgages:
“The budget may seem like a non-event where the housing market was concerned with stamp duty and planning remaining the same. However, it was arguably just what was needed.
“With the rest of the economy changing around us, the housing market will now benefit from stability rather than further changes.
“With inflation at 11% the housing market may continue to slow for some time but even then house prices are unlikely to be less than they were even a year ago.
“Now it is time for brokers to address the cost-of-living issues with their clients, ensuring that all their clients have protection in place and reaching out proactively to carry out financial reviews to ensure that their clients are in the best financial position they can be.”
Alex Davies, CEO and founder of Wealth Club:
“However necessary, today’s announcement is brutal for higher earners and investors.
“Around 250,000 more people will be paying the top rate of tax, many allowances will be frozen until 2028 and the dividend and capital gains tax allowances are being slashed.
“The good news is there are still plenty of perfectly legitimate ways you can reduce the tax you pay, from investing in pension and ISAs to crystallising capital gains liabilities now rather than next year.
“If you are prepared to take more risk, consider investing in early-stage businesses through VCTs, EIS and SEIS.
“Not only are they very tax efficient, but also your money goes to entrepreneurial companies, which is great for economic growth and job creation.”
Simon McCulloch, chief commercial & growth officer at Smoove:
“There wasn’t much in this Statement on how to stave off a housing market slump.
“Affordability remains a major challenge for first-time buyers and higher mortgage rates are the major issue.
“We were hoping to see plans on encouraging mortgage lenders to re-introduce affordable rates, perhaps through a government backed scheme, or extend the Help-to-Buy scheme.”
Ben Beadle, chief executive of the National Residential Landlords Association:
“The demand for private rented housing is massively outstripping supply.
“This will only worsen as growing mortgage rates make home ownership more difficult to afford.
“The Government has yet again failed to recognise the potential for housing to drive growth and deliver for the economy.
“The Chancellor should have focused on boosting supply by ending the Stamp Duty Levy on the purchase of new rental homes.
“Research by Capital Economics suggests that scrapping this could lead to a £10 billion boost to Treasury revenue.
“This would be as a result of increased income and corporation tax receipts. Instead, these swinging cuts to Capital Gains Tax allowances will dissuade investment for years to come.
“The last thing renters need is an effective further tax hike on the private rented.
“All this will do is discourage investment in the new homes to rent the country desperately needs and drive up the cost of renting.”
Simon Jones, CEO of InvestingReviews.co.uk:
“More bad news for buy-to-let investors as Jeremy Hunt announces a fresh raid on property wealth by slashing the capital gains tax allowance.
“With borrowing costs spiking, and tax relief on mortgage interest already eroded, today’s announcement means that landlording is no longer a viable investment strategy for the future.
“The conversation increasingly among existing landlords is that passive investment platforms like ISAs and SIPPs now provide greater returns with less hassle and fewer taxes than bricks and mortar.
“Policymakers need to be aware that squeezing landlords will have unintended social consequences.
“Tenants are already facing soaring rents across the country, and that trend looks set to accelerate as more investors exit the sector for less-fuss investing alternatives.”
Iain McKenzie, CEO of The Guild of Property Professionals:
“Bringing stability to the economy is the number one priority for the property sector.
“These sweeping cuts alongside increases in taxation will spark fears of a deep recession on the horizon, but these decisions have been taken to avoid predictions of it lasting for two years – one of the longest in this country’s history.
“House prices are unlikely to drop dramatically as the unprecedented demand we have seen in recent years has endured.
“There may be some realignment in pricing to adjust for the rising cost of living, but the market will recover.
“During the global financial crisis house prices dropped by around 19%, however, it has sustained and grown thereafter.
“Despite the increases in tax and budget cuts announced today, the stamp duty cut will remain in place until 2025, which shows that the government sees the property market as driving growth and stability.
“These incentives are crucial to restoring confidence in house-buying, especially now that the Help-to-Buy scheme has ended.
“First-time buyers are being pushed out of the market, as they struggle to meet deposit requirements needed to satisfy lenders.
“We would like to see another version of the scheme that will offer more support to get people on the property ladder and available for all types of properties, not just new builds.”
Riz Malik, director at R3 Mortgages:
“Today’s budget although delivered by Jeremy Hunt was very much Rishi’s.
“With inflation at the highest rate since 1981, a strong course of action was needed especially considering the OBR says the UK is already in recession and that the housing market will slow.
“The retention of Kwasi’s stamp duty changes until 2025 will be welcomed by first-time buyers. However, cutting capital gains allowances from next April could accelerate the disposal of buy-to-let property.
“There could be a buy-to-let bonfire in the next 12 months. Hunt commented that the recession will be shallower and reduced.
“Coupled with the Bank of England’s expectation that inflation will fall by the end of next year, interest rates could fall.
“This signals that tracker products’ recent popularity could continue especially if there is a spread between them and fixed rates.
“With everything that has happened in 2022, the Conservative government are on the last row of Wordle.
“I hope it works or Jeremy and Rishi may need to start practicing their salsa for next year’s Strictly.”
Jamie Lennox, director at Dimora Mortgages:
“The cuts to the capital gains allowance threshold could be the final nail in the coffin for small buy-to-let owners.
“They’re already facing rising rates and the reality is that they can’t borrow enough on a remortgage to switch lenders.
“This could lead to a huge sell-off from landlords that could lead to house prices dropping at a faster rate than they already are.”
Sabrina Hall, mortgage adviser & protection adviser at Kind Financial Services:
“The key to the financial and property markets is confidence.
“I feel that this Autumn statement will provide some confidence given the additional tax for the highest earners and the windfall tax to the energy companies.
“However, inflation is still the biggest concern in the economy and given the increase in inflation has been driven significantly by increased energy and food costs I can’t see anything in the budget that will change that.”
Stuart Wilson, CEO of Air:
“Many advisers will have watched today’s budget and breathed a sigh of relief as the Chancellor seemed to largely leave the residential property sector alone – apart from CGT changes which will impact landlords and stamp duty adjustments in 2025.
“However, if you dig into the details, you will find that with net take home pay shrinking in a higher interest rate environment, the ever-tightening waist band of affordability will impact more clients – especially older ones.
“While advisershave little control over what the Chancellor announces, they can help customers navigate the implications, support their families and boost their retirement income.
“It’s now more vital than ever that advisers speak toclients about all their options, including later life lending which is why Air is providing a comprehensive platform of content, information and tools to help our members deliver better outcomes for consumers.
“Although rates are higher than they have been for some time, products such as equity release can help people to navigate the affordability trap and provide a host of flexibilities which mean that people can actively manage their borrowing.
“Whether they want to make ad hoc capital repayments, ongoing interest repayments or rebroke when rates fall, these are all options you can discuss with them.”
Jonathan Stinton, head of intermediary relationships at Coventry Building Society:
“The announcement of a new Energy Efficiency Taskforce was a promising development, but it would have been encouraging to see plans which immediately help people with the retrofitting of energy-efficient improvements to their properties.
“As it stands, the Government has proposals in place to improve the EPC rating on homes across the UK but has yet to establish a clear plan to implement these changes.
“It’s reassuring that this taskforce has been brought on board to address that.
“There’s been no shortage of credible suggestions shared across the industry.
“The new taskforce needs to get straight to work, so that by the spring budget we’ll see action rather than words.”
