This week’s Autumn Statement was eagerly anticipated by the property industry, perhaps even more so than usual. In the build-up to 22nd November, government officials teased big policy shifts, leaving the property world in anxious anticipation.
First off the mark, the Chancellor laid out an ambitious new target to build 300,000 new homes a year by the mid-2020s. Whilst this is laudable, it needs to be stated that the UK has been missing (smaller) housing targets for some time now. However, in a break from the past, the government quickly signalled its willingness to put its money where its mouth is and committed £44bn to help the property industry achieve this new target.
The Statement also highlighted the staggering number of undeveloped planning permissions – 270,000 residential permissions in the capital alone. Land-banking, as we in the industry call it, directly prohibits the delivery of new homes. It drives up competition for land, the cost of which is ultimately shouldered by consumers through higher property prices.
Land-banking has been a gripe of many smaller developers that genuinely want to build new homes for some time now. It’s encouraging to see this problem is now on the government’s radar.
Whilst the aforementioned is all positive, the real headline was the decision to cut Stamp Duty for first time buyers on properties up to £300,000 (or on the first £300,000 on properties worth £500,000 in London). So much more than just a political punchline, this announcement pricked the ears of industry officials and consumers alike.
As a cost that needs to be paid upfront, Stamp Duty can significantly add to the length of time needed to save for a deposit. So, for those young people facing ever-increasing costs to get on the housing ladder, eliminating a (likely) £5,000 fee is a major boost.
This is also good news for the UK housing market as a whole. Buyer activity has slipped off in recent months due to a number of different factors. But, virtually eliminating a tax that discourages first time buyers, the ‘prime movers’ of the housing ladder could kick-start the housing market and Rightmove is already reporting this might just be the case. This will be especially positive for regional cities, where first-time buyers are in greater numbers and property prices remain competitive, practically guaranteeing you won’t pay any Stamp Duty on an initial home.
This year’s Autumn budget was a boost the property market sorely needed.
As opposed to taking its usual place as a footnote in government policy, housing was elevated to the front page. What’s more, the government showed an understanding of the challenges facing both industry and consumers and positioned itself to take real leadership of these problems.
There is still a huge amount of uncertainty facing the housing market and no doubt new challenges will continue to appear, but this budget provided a foundation for those looking to move forward.
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