Commentators criticise the Chancellor for failing to introduce meaningful measures to help kick-start the property market.
Property commentators expressed disappointment after the Chancellor failed to offer significant help to the housing market in his Budget.
While Philip Hammond extended stamp duty relief for first-time buyers and set out some measures to help improve the pipeline of new homes, there were no major announcements in relation to the property market.
The lack of focus was despite the fact that property transactions have fallen steeply, the number of homes on the market are close to record lows and the UK is consistently falling short of the Government’s target to build the 300,000 new homes every year.
Jeremy Leaf, former residential chairman of the Royal Institution of Chartered Surveyors, said: “The most disappointing aspect of this Budget is that nothing has been done to improve low transaction levels, which is not just bad for the property market but even worse for the wider economy.
“Given the rapid expansion of the private rented sector over the past few years, more support to Generation Rent would also have been welcome, such as sales of rental property to long-term tenants.”
He added that it was also disappointing that there was no comment on how the government will meet its 300,000 a year housebuilding target.
Mike Scott, chief property analyst at Yopa, agreed: “The measures announced in this year’s Budget are unlikely to have a significant effect on the UK housing market.”
He also pointed out that while the new funding and support for house building in both the private and social sectors was welcome, it was likely to take years to actually deliver any new homes.
Failure to reform stamp duty
Property professionals had hoped the Chancellor would take the opportunity to reform stamp duty, particularly at the top-end of the market, where higher rates have led to a steep drop in transactions.
Tax receipts from residential property transactions fell by £250 million in the first six months of the year, which many blamed on fewer high-end purchases and a fall in activity among buy-to-let investors.
Liam Bailey, global head of research at Knight Frank, said: “Stamp duty is a badly designed tax which reduces the efficient allocation of property, limits labour market mobility, reduces the ability of families to access housing that fits their requirements and ultimately reduces supply of new homes.”
New stamp duty surcharge
The Government’s plan to impose a 1% stamp duty surcharge on homes purchased by non-resident buyers was also criticised.
Liam Bailey, global head of research at Knight Frank, said: “The new additional rate of stamp duty for foreign purchasers of residential property will undermine investment in new housing in London and across the UK.
“Further, this new proposal is another in a long line of tax changes which have acted to weigh on property transactions by raising costs and creating market uncertainty and, according to the Government’s own data, are now helping to reduce market liquidity and stamp duty tax take.”
No help for downsizers
Commentators have long called for the Government to introduce measures to help older people in large homes to downsize, with many pensioners put off doing so by high stamp duty and the other associated costs of moving.
They argue downsizing would enable pensioners to unlock some of their housing wealth, while also making more family-sized homes available to those trading up the ladder.
Simon Stanney, non-life products director at SunLife, said: “Almost a quarter of pensioners are more likely to downsize if they are exempt from stamp duty, according to YouGov.
“But, despite calls to cut stamp duty for pensioners, the Chancellor has decided not to put any measures in place to make it easier and cheaper for older people to move.”
Jeff Bromage, managing director for Saga Personal Finance, said three out of five of its members who wanted to down-size were put off from doing so by the costs involved.
He said: “The Chancellor has yet again missed a vital opportunity to increase fluidity in the housing market by reducing the cost burden for those right-sizing ready for retirement.”
Commentators were more positive about moves to help first-time buyers and clarity on the Help to Buy equity loan scheme.
Grainne Gilmore, Knight Frank’s head of UK residential research, said: “The extension of the first-time buyer stamp duty relief for those purchasing through shared ownership is a positive move to help more buyers on to the housing ladder.
“It was an unusual move by the Chancellor to backdate his decision, which will mean thousands of extra new homeowners will also receive a surprise rebate.”
Jackie Bennett, director of mortgages at UK Finance, also welcomed the extension of the Help to Buy equity loan scheme until 2023.
She said: “Last year the number of first-time buyers reached its highest level in a decade, boosted by vital schemes like Help to Buy.
“Today’s announcement provides further clarity and will bring welcome certainty to the new-build housing and mortgage market.”