March 21, 2019
What did the Spring Statement say about housing?
Brexit is currently hogging all the headlines. Which meant the latest Spring Statement – essentially a mini-Budget – rather flew under the radar.
But what did the Chancellor’s latest address say about housing? We take a closer look.
A backseat for housing
The Spring Statement manly focused on Brexit and, less expectedly, the environment. But it was low-key from a housing perspective.
That said, there were a number of property-based announcements. Some concerning existing measures which have boosted home ownership. Some which the government hopes will boost them in the future.
It said a number of recent measures had helped to increase the chances of young people owning, with:
- 240,000 people helped onto the property ladder by the abolition of stamp duty for most first-time buyers in November 2017. Restoring the number of first-time buyers to above 50% for the ‘first time in a generation’.
- 220,000 additional homes delivered in 2018. The highest number built in all but one of the last 31 years.
- A repeat of the government pledge first made in the autumn Budget 2017, with a five-year, £44 billion housing programme. This aims to increase housing supply to 300,000 new homes each year by the mid-2020s.
New announcements were made, too, including:
- A £3 billion Affordable Homes Guarantee scheme to support delivery of roughly 30,000 affordable homes.
- The launch of a £1 billion Enable Build SME guarantee fund.
- The release of £717 million from the Housing Infrastructure Fund to unlock up to 37,000 new homes on sites in West London, Cheshire, Didcot and Cambridge.
Furthermore, some key announcements on planning and the environment were aired by Philip Hammond.
For instance, a new planning guidance will be introduced to diversify the number of property types on development sites. There will also be reforms to allow more change of use between premises. As well as allowing the upwards extension of existing buildings to create new homes.
The Future Home Standards, meanwhile, will end fossil fuel heating systems in all new homes by 2025. Plus, there are plans for increased green gas in the National Grid, reducing dependence on burning natural gas to heat homes. And initiatives to better protect wildlife in the planning system.
No mention of the PRS
Major reforms to the private rented sector have been announced in recent fiscal events. From the extra stamp duty surcharge to the introduction of a ban on tenant fees. This time, though, there was nothing.
Some will see this as a reprieve. Others will be disappointed that Hammond has failed to provide private landlords with any relief.
Calls to change stamp duty for landlords were again made before the Spring Statement. Others wanted tax breaks for landlords to offer them a boost. Neither came.
Richard Lambert, chief executive of trade body the National Landlords Association, said. “The Spring Statement does nothing to relieve the pressure on landlords from increased taxation or the costs of complying with new regulations.”
He added: “On the other hand, we should be relieved that the Chancellor hasn’t used the statement to add to those pressures. In the current political climate, that’s probably the best we can hope for.”
Is Brexit having an impact?
All the evidence suggests Brexit uncertainty is having a dampening effect on the sales market. Many buyers and sellers are employing a wait-and-see approach.
This, in turn, is leading to low activity levels. The rental market is being far less affected, given it’s a more urgent market. However, the property industry as a whole thrives off certainty and stability.
While the Brexit process currently appears to be in permanent crisis, Theresa May’s latest move – to ask for Brexit to be postponed for three months – could provide a bit more clarity to sellers and buyers.
This could boost the property market in the short-term. What’s more, given more time to improve her deal and get more MPs on side, May could increase the chances of a smooth and orderly Brexit come June.
To conclude, the Spring Statement didn’t tell us much new about property. But more could be announced in the government’s next Spending Review. And, after that, the autumn Budget – now the major fiscal event of the year.
To find out how much your home could be worth in the current market, why not request a free and instant online valuation?