It is Chancellor’s Philip Hammond first Autumn Statement on Wednesday, so I thought I would do a little crystal ball gazing and also perhaps give Mr Hammond some hints and tips on what he might include to boost the housing market and provide some early seasonal cheer for beleaguered house sellers, buyers and landlords.
It has been quite a year for the property market with stamp duty changes (and hikes!) increased taxation on second home ownership and reduced tax relief on buy to let owners mortgages come April 2017. So will the Chancellor give the house market a break?
I don’t know if you are aware the Mr Hammond has a residential property background? So hopefully he will be more understanding and sympathetic of market influences. So what is needed?
Well, firstly one of the biggest issues in this country is the housing supply – or rather lack of! The population is growing at an alarming rate, we are living longer and there is also the highest single occupancy rate ever! We need to build over 250,000 homes per year, but haven’t come close to achieving even 200,000 per year since the 1980’s as successive governments have talked plenty but delivered very little. So let’s stop the rhetoric and look to offer better incentives to builders to build more homes including more affordable and shared ownership housing and more build to rent. I read a piece the other day by Russell Quirke, yes I know! And Russell was spot on when he suggested the government needs to create more grey sites from Greenfield sites, reducing the red tape around planning and release more Brownfield sites. We also need more retirement homes, it is scandalous that there are only 141,000 that have ever been built and very few bungalows, yet there are more than 11 million people aged 65 or over in the UK, most of whom are homeowners and the number is rising. Many would like to down size but the lack of suitable alternatives puts them of moving. Building more suitable homes would increase the number of properties coming to the open market.
Stamp Duty Land Tax (SDLT)
In 1997 stamp duty accounted for 1 billion into the exchequer! It’s now grown to over 9 billion – so it is highly unlikely that the government will be in a hurry to reform such a cash cow.
Personally I would like to see stamp duty scraped completely but that isn’t realistic, however a reform where the onus was placed on sellers who have probably made a fair bit of money on the sale, whereas poor beleaguered buyers are having to find increased deposits in a fast rising market. It is not ideal but better than the current imbalanced situation. The whole SDLT needs simplifying.
It would be great to see the Chancellor take another look at the changes proposed to Mortgage interest tax relief coming into effect in April 2017 but again I can’t see it. The uncertainty surrounding Brexit will be rumbling on for some time and keeping pressure on the whole economy so I can’t see the Chancellor being overly benevolent, more careful as we go I am afraid!
So there we have it, I don’t think it will be a very exciting Autumn statement as far as the house market goes but neither do I think there will be any nasty surprises as a buoyant house market is essential to the economy and the many associated industries/retail businesses that rely very heavily on people moving home.