PROPERTY INDUSTRY REACTIONS TO THE BUDGET 2017


David Lee, Head of Sales at Pastor Real Estate

“The budget today is largely positive, particularly by comparison to those in recent years. It appears Philip Hammond really seems to understand the housing problem – the UK needs consistently to build more houses, year on year, to improve affordability and his promise to commit £44 billion over five years to tackle housing is a clear demonstration of this.  The major problem with house prices in the UK is a supply/demand problem. If the government can help, in particular working with the private sector, to build more houses this will benefit everyone.

“The abolishment of stamp duty for first time buyers will clearly be helpful for people to get onto the property ladder. However, we had hoped that there would be further stamp duty and wider tax reforms to rejuvenate the residential property market in the UK because this is what we view as the key problem in our market at present.   It is great that the Chancellor recognises the need for productivity in the UK to improve, hence increasing salaries. From a real estate perspective this will help to stop the gap between average salaries and average house prices widening further. Previous generations did not experience the same challenges that home buyers do today with regards to saving enough to buy. We hope that first time buyers return to those in the 20’s rather than in their 30’s as it is today.

“For both our landlord and tenant commercial clients, we see the proposed changes to business rates as good for business; these should make a real impact on the British economy as a whole so we see this as very encouraging for the future.”

I can see increased competition for properties priced at £500,000, which may inflate the lower end of the market more & totally counteract the stamp duty saving

Camilla Dell, Managing Partner at Black Brick

“It makes positive headlines that stamp duty has been abolished for first time buyers purchasing a property valued up to £300,000 in the UK and the first £300,000 for properties priced up to £500,000 in London. However, this will have limited benefit for home buyers in London, where the average property price is already £481,556 (according to the house price index) and the availability of properties priced at £500,000 or less in Central London is limited. In London, affordability is the real issue facing first time buyers, not stamp duty. I can see increased competition for properties priced at £500,000 as a result of this change, which may inflate the lower end of the market more and totally counteract the stamp duty saving.

“More needs to be done to help people to get onto the property ladder and stamp duty needs to be reformed across the board in order for this to happen. The market in London has stalled in terms of volumes – people are not moving up or down the property ladder anywhere near as often as they once did, causing a dysfunctional market across all price points. Developers need to be incentivised or even commissioned by Government to build more affordable homes.

“Although this change is a step in the right direction, it will take a lot more to improve the housing market. Help to buy has its flaws, first time buyers need help to save for a deposit and ultimately homes need to be more affordable in London and made more available.”

I’m not greatly surprised that there are no measures to help unlock the top end of the housing market

James Bailey, CEO of Henry & James

“This is a wonderful move to help first-time buyers but unsurprisingly it does little to help purchasers in prime central London where most prices significantly exceed that threshold. I would like to have seen perhaps a cut in stamp duty across the board, maybe in place of the move to allow local authorities to charge 100 % more in council tax on empty homes.

“However, I’m not greatly surprised that there are no measures to help unlock the top end of the housing market. Everything remains much the same. It was a Budget to appeal to the youth vote, understandably. First-time buyers should be very pleased.”

Hammond has not gone far enough to support Britain’s property sector

Martin Bikhit, Managing Director at Kay & Co

“We welcome the changes to stamp duty for first time buyers, which has been abolished for those purchasing a new home priced up to £300,000 and the first £300,000 for properties priced up to £500,000 in London. However, this is assuming that they can find something in this price bracket in London, where prices average £481,556 and cheaper stock is not plentiful as second steppers being unable to move further up the ladder, due to the punitive stamp duty rates which currently exist. Stamp duty needs to be reformed across all price brackets to make a big difference.

“We have seen a reduction of family homes coming onto the market because sellers don’t want to be faced with the stamp duty burden when upsizing or downsizing. This is stopping those on the ladder to ‘second step’ or downsize and therefore is not making way for first time buyers to get onto the ladder.

“The Chancellor’s announcements on planning reform and to deliver 300,000 new homes a year are also welcome. Too many new housing projects get mired in bureaucratic red tape and, by giving local authorities more latitude, Mr Hammond has started to get on top of the problem. Hopefully, more streamlined planning procedures will enable more new homes to be built faster.

“Hammond has dipped his toe in the water but he will need to jump off a top floor diving board to solve the housing crisis and get the market moving.”

The boost for house building & abolishing stamp duty tax for some first time buyers had an element of political survival about it, but this will bring a lot of change to the market

James Roberts, Knight Frank, Chief Economist

“The Chancellor’s Budget speech has given the property industry lots to think about. The OBR’s forecast that 600,000 jobs will be created by 2022 suggests the property market has reason to feel confident about future demand; as a high level of employment is the bedrock beneath a strong real estate market. Nevertheless, the downwards revision of the GDP forecast is a concern, and will dampen business confidence at a time when there is already a lot of Brexit gloom circulating.

“The rise in the national living wage, and increases in the thresholds for income tax, should put more money in consumers’ pockets, which will ultimately benefit the markets for retail property and warehouses, given the rise of e-shopping. The government’s push to support digital industries will also drive activity in the office market where, in both London and the regions, the technology, media and telecoms (TMT) sector is overtaking finance as the main source of demand.

“The boost for house building and abolishing stamp duty tax for some first time buyers had an element of political survival about it, but this will bring a lot of change to the market. Targeting urban areas, not the green belt, for future house building makes sense, as people now want the short commuting times and 24/7 lifestyle that comes with living in a city. The Chancellor’s promise to speed up and improve the planning process will need to be delivered on if we are to see anything like 300,000 homes built each year.”

This is a step-change for first-time buyers

Gráinne Gilmore, Knight Frank, Head of UK Residential Research 

“This is a step-change for first-time buyers, recognising the challenges that those trying to climb onto the property ladder face in saving for a deposit. Any relief from an additional expense is to be welcomed. Around 340,000 first time buyer mortgages were taken out to purchase property in 2016.

The Chancellor estimates the move will cost £3.2 billion over the next five and a half years, but he has room for manoeuvre here, as stamp duty receipts from residential property were £2.2 billion higher in the year to Q3 2017 compared to the annual receipts in 2014.

“First-time buyers purchasing a £200,000 home will now save £1,500 in stamp duty, while those purchasing a £450,000 home will save £5,000.

“It may be nearly ten years since the financial crisis, but the new mortgage lending model brought in after the financial system is here to stay – meaning that those climbing onto the property ladder are having to source much larger deposits than they did pre-2007. Anything which cuts the financial pressure for potential purchasers trying to bridge the ‘deposit gap’ can only help.

“Policymakers may want to turn their attention to the rest of the market next, as there is evidence that movement up and down the housing ladder by ‘home-movers’ is also hampered by the cost of stamp duty.”

Chancellor Phillip Hammond has again committed to providing funds geared towards driving housebuilding, housing infrastructure & increasing new homes supply

Jennet Siebrits, Head of Residential Research, CBRE UK

“Chancellor Phillip Hammond has again committed to providing funds geared towards driving housebuilding, housing infrastructure and increasing new homes supply.

“Today, the Chancellor pledged a further £15.3bn in to housing initiatives over the next five years. This includes an additional £1.5bn towards the Home Building Fund aimed at supporting SME’s, a further £2.7bn towards housing infrastructure, £400m towards estate regeneration, and £34m for training initiatives to increase construction worker numbers. The latter is imperative to not only drive housing supply, but also for boosting local economies.

“His biggest announcement however was a welcome abolition of the Stamp Duty tax for all first-time buyers purchasing a property up to £300,000, and on the first £300,000 for purchases up to £500,000.

“Whilst this measure makes positive headlines, and will enable more first time buyers to get in to new homes, the reality is that this policy change will have different impacts across the UK. It will be clearly more effective in regional centers where average house prices are more aligned with national averages and wage growth.

“The tax relief is likely to have a more marginal impact on first time buyers in the capital, with an average London property costing £481,556 (based on Land Registry HPI). To ensure it doesn’t just translate to higher prices, housebuilders will need to deliver quality housing to match the demand.  The proposed new policy on promoting minimum city centre housing densities may well assist on this.

“The Chancellor addressed issues around planning and land supply. A £1.1bn fund has been put in place to “unlock strategic sites” for regeneration and housing supply, including new settlements and ‘garden towns’. This initiative sounds promising, but to create viable regeneration projects at a pace that enables us to really challenge the housing shortage, housing developers and planning associations must be fully collaborative. This will bring new homes forward at a faster rate, allowing us to go one step further that the Government’s promise of an average of 300,000 new homes developed per year by the mid 2020’s.

“Hopefully this fund, combined with ongoing infrastructure investment, will continue to help provide better roads and transport links for those sites that are currently inaccessible and unviable for large scale housing development.”

A wasted opportunity for real reform

James Wyatt, Parthenia

“Any cut in SDLT is welcome, but Stamp Duty Land Tax is a very inefficient tax, which reduces transactions and prevents mobility of labour and this was another missed opportunity to replace it with a Land Value Tax. The top end of the market has suffered since the George Osborne SDLT hike of 2014 and this weakness will slowly start to permeate the rest of the housing strata leading to further stagnation. What the country needs is more housing and this needs significant planning reform not yet another consultation.

“Verdict: a wasted opportunity for real reform.”

It is surprising that housing policy changes have not been more holistic in their approach

Gary Hersham, Beauchamp Estates

“As housing had been billed as one of the key themes of the Budget it is surprising that the changes have not been more holistic in their approach, as the UK property market is a key economic driver. The move to increase building development and creation of new homes is welcome, but will not in itself address all the UK’s housing issues, nor will he application of 100% council tax premium on empty properties.

“The revisions to Stamp Duty Land Tax (SDLT) may benefit first time buyers, but not those wishing to move within the market: a position that will stifle the full positive impact of revisions for first time buyers, as existing home owners remain deterred from moving and in doing so reduce the availability of stock and natural movement in the property chain.”

“Failing to address the issues for existing home owners within the property market will prevent the sector from delivering maximum benefit to the broader UK economy, at a time when such contributions are vitals.”

A very underwhelming budget

Andrew Langton, Chairman of Aylesford International 

“The abolishing of stamp duty to first time buyers of up to £300,000 and up to the same amount on a £500,000 home is welcome news but there are few properties at this level in Greater London and it will have little impact on the gradual slide in values throughout London above the £5m level. £44bn in government support to boost construction to meet the target of 300,000 new homes is good news but one is cynical about this target ever being achieved as we have heard similar projections given by previous chancellors. The introduction of a 100% council tax premium on empty properties is very welcome as is the CPO on land banked properties by developers.

“Otherwise a very underwhelming budget.”

The change to SDLT will not have any impact in Central London

Brendan Roberts, Director, Aylesford International

“Well the change to SDLT will not have any impact in Central London. No new developments in Central London that I know of have any flats priced at £300,000 or less, or for £500,000 or less for that matter and little if anything in Greater London is being developed with a domestic first time owner occupier buyer in mind.”

I would have liked the Chancellor to look at the housing market as a whole from the top down

Edo Mapelli Mozzi, CEO of Banda Property

“The Chancellor has recognised the need to make changes and is going the right way about it by clearly addressing the issue of supply and demand.  The abolition of stamp duty for first time buyers on property of up to £300,000, acknowledging that buyers in high price areas such as London need extra help is a significant step forward, as is the pledge of £44bn over five years for loans and guarantees for building.

“I welcome the investment in to the sector and into skills training, infrastructure, planning reforms and his promise to look into the disparity between planning applications granted and houses actually built.

“I would, however, have liked him to look at the housing market as a whole from the top down, not just focussing on first time buyers and a pledge to build more houses.  By addressing the issues at the top end of the market – namely the higher rates of stamp duty – the Chancellor could have re-energised a challenging market at a time when it needs mobilising.  The big urban regeneration schemes Hammond talks about might not viable without funding from the top end of the market which is currently stifled by the stamp duty escalation.”

A remarkable Budget which appeared to be all things to all people

James Robinson, General Manager at Lurot Brand 

“Following Jeremy Corbyn’s banquet of undeliverable promises at the last election Phillip Hammond had to woo the youth vote back and with by-elections looming he had to deliver something quite spectacular or risk losing the Government’s majority. Watching him at the dispatch box he did just that with a remarkable Budget which appeared to be all things to all people and was delivered with confidence.

“However, the big problem for London is that, for political reasons, Hammond could not be seen to reward the wealthy by cutting Stamp Duty on expensive properties. Yes, abolishing Stamp for FTB’s is fantastic and will help thousands of individuals, but the change in property markets always starts from the top and ripples outwards and London is invariably the epicentre of these changes. So I fear the transactions in Central London will remain anchored to a near standstill for the foreseeable future.”

The absence of any further negative measures is good news for the Prime London residential market

Mark Pollack, Director at Aston Chase

“The absence of any further negative measures is good news for the Prime London residential market, as “appeared” stability is long overdue! We have already had two exchanges and two deals agreed since the budget from buyers who had been holding back awaiting to see what Phillip Hammond had in store for us. Of course, the raising of the threshold for SDLT for first time buyers is also good news and will also hopefully have some kind of ripple effect on the wider market.”

Cutting stamp duty for First-Time Buyers at this critical time will help keep the market moving

Paul Cook, Managing Director of Dukelease

“Cutting stamp duty for First-Time Buyers at this critical time will help keep the market moving and extend the concept of home ownership to a greater number of young people. It is a modest enough move in that it won’t dramatically inflate the first-time buyer market, but will be a significant boost for people saving for their first purchase. When every thousand pounds counts, cutting the costs on top of the deposit can make all the difference.

“While this is a welcomed move, it is important that the Government continues to review the impact SDLT has on the wider market, especially on the squeezed middle. Failure to keep the second and third rungs of the ladder moving will limit the supply of suitable homes for the newly enabled first-time buyers.

“It is also positive to hear that the Chancellor recognises the important role SME housebuilders can play in delivering targeted developments across the UK and providing expertise and change from the dominant largescale developers. Smaller housebuilders can be more flexible in their models, ensuring the homes they build can adapt to modern living, and we look forward to learning more about the plans he has to help diversify the industry.”

This stamp duty announcement could  cause a bottle neck at the £500,000 threshold

Guy Gittins, Head of Sales, Chestertons

“This is great news for first-time buyers. On top of the Help to Buy scheme and other incentives already in place, abolishing stamp duty up to £300,000 is a positive step from the government to help this group of buyers onto the housing ladder. It is however disappointing that the Chancellor didn’t raise the stamp duty threshold in London to £500,000 to reflect the higher average house price in the capital which now stands at £483,568, according to Land Registry.

“While it will have a more noticeable impact in areas outside of London, it almost certainly won’t spark an overnight growth in the London property market because buyers further up the ladder are still struggling with the higher levels of stamp duty that are paid for properties over £1 million. This is a big issue in the capital and one that should have been addressed in today’s budget because it has massively reduced Londoners’ ability to move up and down the ladder. Homeowners that have either outgrown their property or need to downsize feel trapped because they cannot afford the stamp duty required for each transaction. Where  people would have made three steps previously, they can now only afford to make one, which we believe is impacting on many people’s quality of life.

“The real issue that needs to be tackled is increasing the supply of properties, and while the Chancellor has committed himself to addressing ‘land banking’ by developers, without sufficient supply, this stamp duty announcement could  cause a bottle neck at the £500,000 threshold.”

The second half of the chancellors speech was definitely housing heavy

Mark Parkinson, Director, Middleton Advisors

“The second half of the chancellors speech was definitely housing heavy with a stated intent to provide fresh opportunities for first time buyers and continue building homes. The long wished for reduction in SDLT rates did not emerge and is highly unlikely to for the foreseeable future. The abolishment of stamp duty for first time buyers under £300k is a clear step to woo younger voters which the conservatives desperately need. The other policy which will affect owners of multiple homes is the doubling of council tax for empty homes. It is important to note that this is empty homes not second homes although as ever the devil will be in the detail!”

How will the first-time buyer plan be policed?

Giles Cook, Head of Residential Agency at Best Gapp

“Encouraging news from the Chancellor regarding the Government’s decision to abolish Stamp Duty for first time buyers on the first £300k (and in more expensive areas on the first £300k on a purchase price below £500k).  However, the sceptic in me is concerned about how he plans to police the qualification process. Existing SDLT rates further up the chain continue to prevent there being any rhythm to the market and a wider reduction would have gone a long way to free up the stalled marketplace.”

The first budget in five years that has delivered good news for the property market

Caroline Takla, Director at The Collection LLP

“This is the first budget in five years that I feel has delivered good news for the property market. Successive budgets since 2012 haven’t been bastions of good news, with taxes on residential property and how it’s owned increasing year-on-year, which has hit the market like a sledgehammer. Therefore, the reduction to stamp duty for first time buyers is a major positive, but it does little to massage the prime London market, creating further distortion at the bottom end of the market that will fundamentally make it more expensive for first time buyers in the long-term.

“We also welcome the Chancellor’s announcement for more land to be unlocked that is suitable for development, whilst protecting the precious green belt. It’s also good to see more incentives introduced for small and medium-sized developers to build new homes, rather than adding to the monopoly that some of the national housebuilders have had for some time.

“However, if meaningful stamp duty reform is not addressed in the near future, developers, particularly in London, where the cost of land, materials and labour are higher, will not be incentivised to build, as fewer people buy because of higher transaction costs.”

I support Mr. Hammond’s initiative, wholeheartedly, by applauding the government’s laudable aim of making home ownership a human right rather than a privilege, as at present

Trevor Abrahmsohn, Glentree International

“The abolition of Stamp Duty for first time buyers up to £300,000 is a very good initiative, however, whilst it is a very welcome £5000 gift for these vulnerable groups, it never the less may serve to ‘stoke up’ the market at the lower end, which could perversely, work against them.

“The former Chancellor Osborne, reduced Stamp Duty at the lower end which exacerbated inflation in this sector from circ 5-8%, particularly in London, and this served to disenfranchise buyers at this end of the market since their deposits were not rising at the same pace as prices.

“The concession of a £300,000 ‘holiday’ on Stamp Duty on properties up to £500,000, which must include much of London based areas and is welcome indeed.

“The £44billion of government support and loan guarantees to boost construction skills is very necessary, particularly as we lose some EU nationals from the uncertainty surrounding Brexit, who would normally gravitate to this employment sector.  I have always said that, in some cases, the youth should be directed towards certain key skills by way of apprenticeships, rather than university degrees, since the former are so crucial to our post Brexit survival and to build more affordable homes.  A bricklayer, for instance, can earn up to £150,000 per annum, which elevates them from ‘blue collar’ status to the new ‘middle class’ and we are desperately short of them today, in the construction world.

“The doubling of Council Tax premiums on empty properties could be a little too modest, but it is an illustration of the government’s determination to increase the supply of new housing.

“Developers of all kinds and creeds will be worried abut the threat of a compulsory purchase of land, banked for judicious financial reasons and this will certainly keep them ‘on their toes’.  However, if these are in an area where there is an oversupply of unsold properties, I am not sure if you will ever persuade them to build more properties that when complete, will exacerbate the stock overhang and reduce prices even further.

“The solution to over supply is to get the housing market moving again which has, in some cases, ground to a halt, because of the high Stamp Duty charges imposed by the previous Tory Party regime.

“If all the initiatives manage to increase the housing supply from 217,000 to 300,000 new homes, this is indeed a great accomplishment. But, to put it in context, it is still no more than were built under Margaret Thatcher’s reign in the 80s.

“One would have thought that the analysis of the housing market, as it relates to the planning process, would have already been completed by now, without the need to initiate a government scheme to look into this important matter.  Quite apart from the numbers of planning consents, which have not been built out, there needs to be a ‘root and branch’ reform of the planning process itself, in order to ‘weed out’ petty local politics, so that planning applications are dealt with on planning criteria and nothing else.

“Permitted development rights have certainly increased the supply of residential properties that have been converted from offices and this ‘quick fix’ method needs to be extended even further.  As Isaac Newton so eloquently put it, ‘any action causes another equal and opposite reaction’.  Rent of commercial space has gone up as a result of there being less supply, which is good for the landlords but not for the businesses that take the space and who are already under pressure.  Reigning back Business Rates for instance will certainly assist.

“The £3billion reserve to prepare for Brexit is very necessary and will demonstrate to our obdurate EU counterparts, during the heated negotiations taking place as we speak, that we are prepared for every eventuality, including ‘no deal’.

“As to the Budget Deficit, it is moving in the right direction, albeit more slowly than predicted which, perhaps, demonstrates that the Chancellor is willing to ease the pressure on austerity, whilst still keeping government finances in kilter.

“Goodness knows what would happen if an unbridled Labour, Marxist, administration were to get their ‘thieving hands’ on the budgetary levers of power, by opening the sluice gates of spending/borrowing and before we look around, the ‘banana republic’ deficit that Gordon Brown and his ‘merry men’ imposed on us, will look like a ‘walk in the park’.

“I support Mr. Hammond’s initiative, wholeheartedly, by applauding the government’s laudable aim of making home ownership a human right rather than a privilege, as at present.”

I’m disappointed that he hasn’t looked at revising the levies at all levels to get the market motoring again

Simon Gresswell, Partner at Finlay Brewer

“Whilst there were a number of positive initiatives announced in today’s budget I would have liked to see Philip Hammond do more to address the impact SDLT is having on the wider property market. Doubling the 0% SDLT entry price to £300,000 is a good move to help first time buyers, but that wouldn’t get you very far in London or even some of the other major cities in the UK. SDLT  across the board continues to seriously hinder mobility amongst London working families and downsizers alike; furthermore the additional 3% stamp duty for second homes is strangling the buy to let/investment market, especially where we are in West London. So I’m disappointed that he hasn’t looked at revising the levies at all levels to get the market motoring again.

“The double council tax threat will encourage some owners to rent out or sell, but more clarification is needed, for example will there be an initial ‘marketing period’ and what happens when a property is being refurbished?  I’m interested to see how this would be policed, as we could just see many Landlords simply registering themselves as living in the property and using technology to make their home look ‘occupied’ by automatically switching lights on and off or some other diversionary method.”

What currently might feel like living in Brands Hatch will soon be restored to a peaceful setting, adding significant value

Ed Heaton, founder & managing partner of Heaton & Partners

On the £400m boost to infrastructure for electric cars: “This new investment in electric car charging points will undoubtedly speed up the electric car revolution. The end of the combustion engine is nigh. As a result, many people whose homes are currently blighted by being located on busy, polluted roads in London or near motorways and dual carriageways in the country will see their quality of life transformed. Currently undesirable locations will benefit hugely and the value of properties near certain major roads will increase dramatically once the transition is complete. It’s long been known that prices of houses on or near a busy road can be as much as 60 per cent cheaper or more.

“What currently might feel like living in Brands Hatch will soon be restored to a peaceful setting, adding significant value, thanks to the Chancellor speeding up the electric car revolution from today. This can only have a large knock-on effect on the property market in certain areas.”

The government needs to go further reducing the drag on higher value properties and investors

Parul Scampion, COO at Fruition Properties

“Hammond’s plans to support smaller developers by improving access to funding, skills and land marks a positive step towards tackling the chronic lack of housing in the UK.

“While encouraging to see that the Chancellor has acknowledged the need to invest significantly in training new construction workers, the Government needs to realise the scale of the problem particularly given the uncertainty around the availability of European workers following Brexit.  A lack of skilled workers has been an inhibiting factor for many years and will be one of the main barriers to delivering increased housing units particularly in London, even with this boost to training new construction workers.

“By abolishing stamp duty for a healthy portion of first time buyer purchases, the Government has seized a golden opportunity to remove at least one element of the fiscal drag created by layers of incremental SDLT. This will go one step towards creating a healthy, frictionless process which will increase liquidity in the housing market and therefore mobility for the job market; both of which are important factors for a thriving economy. However, given the large revenues being earned by HMRC from SDLT,  we believe the government needs to go further reducing the drag on higher value properties and investors – important elements of a healthy, properly functioning property market.”

Some welcome moves – but what is a First Time Buyer? 

Charles Curran, Principal and Data Analyst at Maskells

“Housing was always going to be central to this budget; it is desperately needed and it is sound politics – appealing to the younger vote.  We welcome the new homes target, the new Homes England agency and await with interest the outcome of the new commission to explore why the 270,000 planning permissions granted have not yet turned into housing starts.

“We also welcome the cut in Stamp Duty for first time buyers on properties up to £300,000 and the extension of this policy to the first £300,000 out of a maximum of £500,000 property price in more expensive areas, such as London.  However, it’s deeply disappointing that the rest of the SDLT spectrum was not reduced.  There are a few points to consider: will this £300,000 to £500,000 maximum limit produce a cliff edge creating dead zones and property price chasms, making it hard for many to breach?  Downsizers, whom we desperately need to move to free up larger housing stock, are not at a competitive disadvantage as they may be looking at the same properties as a FTB, but will have to pay more.  This does not seem fair but is very political.  Whilst we have the promise of new homes, what are FTB’s going to buy now, when those they are seeking to purchase from will face the full burden of SDLT as they seek to move.

“Finally, what is a First Time Buyer?  In the Help to Buy declaration anyone owning or having a right to occupy property or an interest in land is excluded, as is anyone who received a bonus from a Help to Buy ISA.  However, in 2010 HMRC also sought to exclude anyone whose partner owned property.  This is crucial and we await HMRC’s budget notes to answer the question fully.

“Furthermore, the OBR anticipates that inflation will increase by 3% over the next year and then by 2% per annum thereafter; will the FTB limits increase in line with this?

“The government must also consider what will happen when FTB’s cannot find homes to buy or cannot afford them under more stringent lending criteria and an increasing interest rate environment.  Will their patience wane before the next election?”

This is a government that’s finally ready to intervene in the property market

Christian Faes, Co-Founder & CEO, LendInvest

“Philip Hammond has shown that this is a government that’s finally ready to intervene in the property market, and this will be welcomed by industry. Now they must leverage the capacity of lenders in the market to get funds out to those that need it and can get Britain building, finally.”

It is of little surprise that the often-vilified landlords have been overlooked

Rory O’Neill, Head of Residential, Carter Jonas

“The abolition of Stamp Duty for first-time buyers is of course a welcome announcement in the Autumn Budget. It’s a political move too – in part an attempt to engage the disenfranchised young electorate, of whom the Tories have struggled to win any allegiance of late, but also to reengage their often-beleaguered parents who have been footing the bill of leveraging their offspring onto the property ladder.

“Having said that, we continue to question where the support lies for second-steppers – many of whom are desperate to graduate out of their starter home and into a grown-up property. They constitute the increasingly squeezed middle, and we hope that a proportion of the much-needed new homes that Hammond has pledged will be adequately sized and ringfenced for these forgotten homeowners looking to secure enough space in which to bring up a family.

“The Chancellor has potentially missed a trick in failing to incentivise empty-nesters and prospective downsizers, many of whom retain their four and five-bedroom homes without filling them, at the expense of the second-steppers’ ability to upsize. While the supply of new homes needs to be upped, we also need to better allocate the homes already in existence.

“Owner-occupiers aside, it is of little surprise that the often-vilified landlords have been overlooked. Many small-scale, private landlords are at breaking point and struggling to make their portfolios viable as it stands, so we hope that they will be rewarded financially for delivering the long-term tenancies that the Chancellor called for today.

“In addition, it goes without saying that applying a 100% Council Tax payment to empty properties needs further clarification. Hammond can’t possibly penalise landlords whose homes are empty because of unexpected void periods or properties that are empty during a probate sale, for example.”

Unfortunately cutting stamp duty cannot help the main issue: the actual pricing of homes

Martin Walshe, Head of New Homes, Cheffins

On Stamp Duty: “Scrapping stamp duty for first time buyers up to £300,000 is a welcome move for those struggling to get onto the housing ladder. Any help we can give to first time buyers to alleviate the burden of finding high deposits as well as footing the bills for all other moving costs should be considered. The issue in the main however, is the actual pricing of homes coupled with the severe lack of affordable property and unfortunately cutting stamp duty cannot help that.

“It is clear that stamp duty is a golden goose for government and of course there is going to be an unwillingness to cut stamp duty receipts too much, however, the suggestion that profits will be used to help fund affordable housing and boost schemes such as help to buy cannot be argued with. Stamp duty has affected all sectors of the market and has caused transactions to fall across the board. Probably the most noticeable effect has been on the middle and prime markets and this ought/has been/should be addressed if Philip Hammond wants to kick-start the housing market. Increased activity in the upper and middle markets ought to have a knock-on effect, increasing transactions and freeing up property at all price points.”

On housing delivery: “To rebalance the supply vs demand equation and fill the deficit of homes to a level where prices will be readjusted will take years. The promise of a £44 billion investment for the housing market and increased freedom for housing associations to build more homes ought to help with delivery, but the proof will be in the pudding as to how many new homes are created for first time buyers. The government has increased the housing budget to deliver a 300,000 more homes with a large swathe of affordable properties within in the mix. However, housebuilding targets have not been met by successive governments for decades and the reality is that the market needs to provide the right homes in the right places at prices which people can genuinely afford.

“On a macro level, the question here really is whether the Housing Association model works when it comes to affordability. There needs to be an element of analysis and accountability held against these promises which will need to be reviewed on a regular basis. Whilst public sector land has been released and there are new financing options and support for small and medium housebuilders, these need to work hand-in-hand with local governments and councils to ensure the delivery of the homes which are so desperately needed. Focus will be on urban and brownfield sites, which is welcomed in protection of the Green Belt.”

On Cambridge: “From a Cambridge perspective, there are currently over 68,000 homes in the pipeline for the region within a 20 mile radius of the city, however we are suffering with an affordability issue. As a city we are providing above average numbers of new properties but the majority of these are not in affordable price brackets for our younger generations. We have seen a plethora of high value new homes in the largest edge-of-city developments, however these are now seeing reducing prices as demand is not reaching the levels of supply from previous years. House prices in general in the city are 13.5 times higher than earnings, making Cambridge unaffordable for many. As always infrastructure continues to be the element which lets Cambridge down so if we are going to provide out of town or edge of city developments, we need to factor in how to reduce congestion and how to support better transport options. The proposed underground line is said to bring the potential for around 50,000 new homes along the corridor into the city centre. This would open up villages south and east of Cambridge, such as Teversham, Fulbourn, Bottisham, Linton and so on and would make these locations increasingly desirable. Towns such as Newmarket and Haverhill would also benefit hugely as the new line could hopefully improve accessibility from those locations into the city centre. This will have a knock-on effect on house prices in these areas which have always been priced at lower levels than Cambridge.”

Abolishing stamp duty for first-time buyers on properties up to £300,000 is a strong move

Chris Lloyd, Associate Director at Enness

On stamp duty for first time buyers: “Abolishing stamp duty for first-time buyers on properties up to £300,000 is a strong move towards stimulating the property market. However, as recognised by the Chancellor, this won’t help first-time buyers in London, so removing it from the first £300,000 of a £500,000 purchase will be a huge help.

“For example, previously a first-time buyer would have paid £15,000, whereas now they will only pay £10,000. This will mean first-time buyers are left needing to find a lot less on top of the deposit up front, in order for them to get on to the ladder.

“Reducing the amount of stamp duty should mean demand returns from first time buyers, which will encourage couples and families to upsize. This will also be positive for the older generation who wish to downsize, but are finding a lack of suitable supply.”

On housing delivery: “The promise of 300,000 homes is no surprise; housing has for the longest time been high on the agenda of the Chancellors of recent years. It’s not only about having homes for the growing population, but has the aim of keeping house prices in line with wages. This is particularly important in the big cities, where talent should be retained, and not encouraged to look elsewhere for more affordable prices.”

On overseas investment in the UK: “Investors around the world still want to come to the UK, weakened sterling means it’s still an attractive option, despite Brexit. This is particularly true elsewhere in the country other than London.

“The UK has a very strong, skilled workforce, with a high standard of education, so people still want to invest in it, and maximise on these qualities.”

It’s a shame that Hammond didn’t place further emphasis on the rental market

Richie Tramontana, Director of Red Property Partnership

On stamp duty: “Whilst Philip Hammond’s Stamp Duty plan announced in today’s Budget is good news for first time buyers, it’s a shame that he didn’t place further emphasis on the rental market when approx. 5 million households in the UK are currently renting.  The extra 3% stamp duty on second home purchases has killed the market for small-time buy-to-let investors and could mean that rental stock is starved in the short-term, pushing up prices for those who can’t afford to purchase or choose to rent for lifestyle reasons.”

On housebuilding:“It’s encouraging that the Chancellor wants to introduce planning reforms to make better use of underused land in urban areas, rather than build on greenbelt land. There’s plenty of opportunity to build upwards, not just outwards, and for developers to change their design strategies, for example building townhouses and apartments as opposed to large family houses.”

Will abolishing stamp duty for first-time buyers really make the difference between being able to buy a home or not?

Jonathan Harris, director of Anderson Harris

“Abolishing stamp duty for the vast majority of first-time buyers is a welcome move but while it will result in some savings, affordability is still the real issue for many. It might enable a first-time buyer to purchase a new sofa but will it really make the difference between being able to buy a home or not?

“The reality is that most first-time buyers cannot get on the housing ladder without significant financial assistance from the Bank of Mum and Dad. The alternative is to save for many years because the gap between incomes and property prices is simply too great. Until that issue is addressed, home ownership will remain just a dream for many people.

“One also has to feel sorry for those first-time buyers who have recently completed on a purchase and who will be feeling understandably miffed at missing out on this windfall.”

The Chancellor has missed a trick by failing to reduce stamp duty levels across the board

Nick Leeming, Chairman at Jackson-Stops

“First-time buyers struggling to save enough to take their first step on the property ladder will be celebrating the break the Chancellor has given them today. In the most expensive parts of the country a typical first-time buyer home can attract a stamp duty land tax liability as high as £10,000, money that can now be entirely, or in large part, ploughed into a deposit or spent on making essential renovations in the vast majority of cases.

“However, without concerted efforts to build more homes, accompanied with a resulting uptick in housing completions, the change to stamp duty today is a sticking plaster on our broken housing market. Similarly, penalising empty home owners with a 100% council tax premium is unlikely to really be a deterrent for people who are likely to be high net worth. If they don’t need the rent, this penalty probably won’t bother them either! The Chancellor’s various strategies for increasing building must now start to yield results, and quickly, with many more completions of homes suited to a range of life stages and needs.

“I do feel the Chancellor has missed a trick by failing to reduce stamp duty levels across the board. First home owners generally want to move up the ladder, to larger homes as their circumstances change and families expand. Stamp duty levels have acted as a brake across the entire market preventing the likes of downsizers and second-steppers from making their moves. The housing market must be viewed as a whole and comprehensive stamp duty reform would have increased overall fluidity to the benefit of all buyers.”

The strategy to boost the largest segment of the market should encourage more investment by housebuilders and help to ease the constraints on supply

Alex Newall, Managing Director at Barnes Private Office

“The major tweak on stamp duty for first time buyers up to £300,000 is a huge help to those on lower income jobs struggling to save up for a deposit. With the combined input of this, £10 billion more for help to buy and financial and training support for SME builders, a pledge has been made to boost the number of new homes from 216,000 per annum currently to 300,000 by the mid 2020’s. A review of unused planning permissions will also be published in the Spring 2018, with the expectation that developers must stop land banking and free up sites for development. This strategy to boost the largest segment of the market should encourage more investment by housebuilders and help to ease the constraints on supply.

“However. the effects on houses price growth will be modest, as the Government only starts to try to tackle the long term housing shortage in England. We expect more low cost flats being built in towns and cities across England, a change of the planning landscape to allow schemes to go ahead which are high density and high quality, near good transport links. Those developers who were hoping that the greenbelt rules would be loosened may be disappointed from the Budget today.  A clear message of support for housebuilding and for FTB’s – get on with it – the Government is here to support you financially. But don’t leave your property empty foreign owners, your local council will charge you a 100% premium on your council tax – so get it let out.”

Speed & getting in early is important for aspiring first-time-buyers

Miles Shipside, Director at Rightmove

“First-time-buyers should think about acting quickly to take advantage of this stamp duty ban, before the extra demand it creates pushes up prices and starts to eat away at the extra cash this Stamp Duty exemption will free up. The Government has already put buy-to-let landlords on the back foot with its 3% Stamp Duty surcharge, so this extra advantage of no stamp duty gives first-time-buyers an extra edge.

“Speed and getting in early is important for aspiring first-time-buyers because supply of suitable properties is limited due to insufficient numbers of new build property in this sector over the last decade. To take advantage of the initial momentum this will generate, owners of properties that are suitable for first-time buyers should think about coming to market if they have been thinking about making a move up the ladder themselves.”

Excellent news for first time buyers

Robert McLaughlin, Sales Director at Kinleigh Folkard & Hayward

“This is excellent news for first time buyers and the savings many will make will help cover the numerous other purchasing outlays such as surveys, legal fees and moving costs. Nearly a third of the properties coming onto the market this year in our areas of London have been at and below £500,000 so there are plenty of homes that fall within the relief bracket in the Capital.”

A welcome shot in the arm for the UK housing industry

Don O’Sullivan, CEO of Galliard Homes

“Abolishing stamp duty for first-time buyers up to a sensible price point is a welcome shot in the arm for the UK housing industry and will help thousands realise their dreams of owning their own home.

“Over the years we have championed first-time buyers through a variety of our own schemes and combined with the Government’s offer to assist by abolishing stamp duty on property up £300,000 we are sure to see more and more first-time buyers entering the market.

“With over 7,000 homes currently in development, we also welcome the news that the Government is investing in the future of our housing market by committing at least £44 billion of capital funding, loans and guarantees over the next five years, with an additional £34 million promised to develop UK construction skills. As we move through the uncertain process of Brexit, investment in the talent and skills of the UK’s residents is just what is needed to ensure we continue to prosper as a nation.” colliers

We have been campaigning for years to get Stamp Duty abolished for those starting off on the property ladder

Terry Holmes, Director at Beresfords

“We have been campaigning for years to get Stamp Duty abolished for those starting off on the property ladder, so today’s announcement is great news! We’ve always seen stamp duty as a tax on first time buyers in London and the South East, where prices mean that even the cheapest property will result in stamp duty being paid, whereas in other parts of the UK a middle earning professional could buy a family house and not pay a penny.

“We also welcome the proposals to build 300,000 homes a year. This is a laudable objective, but the Government promised 200,000 new starter homes only a couple of years ago, which promptly disappeared off the radar. Previous governments of both political persuasions have promised much but failed to deliver, but we’ll have to wait and see.

“We’re also pleased the Chancellor will continue with the Help to Buy scheme as it’s been a tremendous help to a lot of home purchasers, especially first-time buyers, and those looking to get on the second rung of the ladder with small families.

“This budget should also help the ‘Bank of Mum and Dad’, taking pressure off parents to find very large sums to help pay for stamp duty fees.” 

A three pronged attack which, for the first time in decades, actually has the chance of succeeding in delivering the housing stock the country needs

James Allen, head of Walker Crips Alternative Investments

“The Chancellor reaffirms his commitment to get average house building numbers up to 300,000 per annum and realises that this cannot be achieved by the major housebuilders alone. His commitment to support SME housebuilders, lift the borrowing cap on councils that have high house building needs and fund training in the construction industry provides a three pronged attack which, for the first time in decades, actually has the chance of succeeding in delivering the housing stock the country needs.

“This is an example of practicality trumping ideology and should be supported by the vast majority of the population. Following his promised reform of the planning system, if he could also address the non-implementation of planning approval by developers I would predict his 300,000 new build target would be met.

“Abolishing stamp duty on the first £300,000 spend by any first time buyer is a welcome help to those looking to get onto the housing ladder, but it does not address the real issue which is affordability. There are many brownfield sites in London that could produce studio flats which would attract no stamp duty after this latest announcement from the Chancellor.

“Many of these sites have had planning for years (having to be renewed every three years), but are still to be developed. If developers were not allowed to renew planning but instead had to sell the site if their planning lapsed, we would see a vast reduction in the gap between planning approvals and delivery of new housing stock.

“The Chancellor should heed his own advice when he said there was not one magic bullet to solve the housing crisis and he should now turn his focus onto the implementation of planning approvals.”

A significant percentage of land that is consented but not yet built upon in London is as a result of phasing strategy

Charles Holland, Head of Residential Development and Investment at Marsh & Parsons

“Regarding the proposed CPO measures against “landbanking” it is worth noting that a significant percentage of land that is consented but not yet built upon in London is as a result of phasing strategy. This is where the land in question is a phase of a wider masterplan project – Battersea Power Station and the King’s Cross regeneration for example – where it is not possible to deliver all the housing in one go. A primary concern here is a local oversupply of homes to market in the short term, but other factors also come into play such as development logistics where parts of the scheme are rendered undevelopable for substantial periods of time due to site traffic / health and safety.  Should these be interpreted as a “financial reasons” the consequences would be significant and unwelcome.

“One of the biggest, if not the biggest, obstacles to increasing delivery of homes in London is down to a skills shortage in the construction sector, which is likely to be exacerbated by Brexit. The impact of this is to push up labour costs and therefore build costs – rendering sites increasingly unviable as other uses come into play – student housing, hotels etc. A focus on this issue would perhaps have a greater impact on the rate of delivery of new homes in London.

“We welcome any considered mechanism that speeds up the delivery of new homes but the CPO measure will need careful consideration as it could potentially act as a significant disincentive to bring land forward for residential development.”

A huge boost for younger house buyers

Ashley Osborne, Head of UK Residential at Colliers International

“The Chancellor’s decision to abolish stamp duty immediately for first-time buyers purchasing properties worth up to £300,000; and to help those in London and other expensive areas, make the first £300,000 of the cost of a £500,000 purchase exempt from stamp duty for first times buyers, with the remaining £200,000 incurring 5%; is a huge boost for younger house buyers. With 95% of all first time buyers benefiting and 80% not paying stamp duty at all, we’d expect to see an immediate positive movement in the housing market.  The results will be a progressive step for young people looking to buy their first home, both in the capital and the rest of the UK and we would hope that the 20% decrease in 25-35 year old first-time buyers over the past nine years will start to be reversed and more young people will be able to get on the housing ladder.

“Hammond’s promise of £1.1bn to unlock strategic sites for development will go some way to alleviate the lack of supply, and further supporting those looking to purchase a home.”

100% council tax on empty properties is a small deterrent when Hammond could have staged a new raid on offshore tax advantages

Walter Boettcher, Colliers International’s in-house Chief Economist and Forecaster

“The budget was delivered to great expectations with the Chancellor tipping his hat to both political and economic necessities.

“Stamp duty reductions may create a movement in the housing market, so will provide some economic stimulus to balance the economic downgrades. This should be good news for retail too.

“A few substantial sums have been committed to housing and infrastructure as well as further devolution – all positives for commercial property and posing new opportunities for the likes of Andy Burnham and Andy Street. Will this be enough to tempt occupiers out of London and into the regions? I think labour availability may be a more pressing issue in the short term.

“The crack down on cyber sales tax is a very interesting step. Physical retailers will be watching closely as the advantages of internet retailing begins to erode.

“It looks as though foreign investors did not go unscathed if you read the fine print. From 2020 capital gains on UK property for non-residents may well now be in the tax net. This seems likely to have significant implications for the investment market, particularly London where foreign investors currently account for around 75 per cent of central London investment. There is talk of exemptions for pension funds, but we await clarity and indications on how the market might react. In the meantime, this is yet another layer of uncertainty.”

“Given the lack of transparency, it’s hard to know if the £3 billion commitment to prepare for every Brexit outcome proves to be adequate, or just a drop in the ocean.

“In short, a competent budget that may fall short on stimulus, but addresses some political concerns and lays the long term ground work for further substantial development.”

Local authorities will need to be allowed to play an active role in development activity if the 300,000 new homes target is to be reached

Scott Dorling, partner at Trowers & Hamlins

“With the Chancellor’s promise of 300,000 new homes a year by mid-2020s, will the range of measures signalled in today’s Budget be enough to achieve that ambitious target? The UK last built 300,000 new homes in 1977.  In those days, local authorities were at the forefront of development, with almost half of new builds constructed by councils. Amongst the measures, the Government has promised to lift the Housing Revenue Account (HRA) debt cap which would free up local authorities to build the housing needed. But the statement confirms that the debt caps will only be lifted in high demand areas. A lot of detail still needs to be considered like how will high demand areas be identified, will there be a “bidding” process to release the caps, will there be a compulsion to borrow or else lose the borrowing capacity? History has shown that local authorities will need to be allowed to play an active role in development activity if the 300,000 new homes target is to be reached.”

Less emphasis of the provision of additional social or affordable rented housing than might have been expected

Tonia Secker, head of housing at Trowers & Hamlins

“The Government’s emphasis clearly remains focused on meeting the aspirations of prospective homeowners with a number of substantial measures aimed improving the affordability and delivery of homes for sale.  There was perhaps less emphasis of the provision of additional social or affordable rented housing than might have been expected – although a further statement from Sajid Javid is trailed in relation to Council permissions for more homes for affordable rent.  Perhaps the detail of the £44bn financial package to support the housing market will reveal further support for rental provision at the lower end of the market.”

The fiscal handcuffs are finally coming off local authorities

Jonathan Seager, housing policy director at London First

“The fiscal handcuffs are finally coming off local authorities, enabling them to start borrowing to build the homes we so desperately need. But Government has only put a down payment on tackling our housing crisis: £3bn of new money for the whole of the UK means thousands of homes each year, not the tens of thousands we’ve been promised. Government must remain focused on freeing up land and making the best use of it, otherwise the lack of real money available risks shutting the door on their housebuilding ambition.”

This was rightly a Budget focused on investing in UK plc

Stephen Jones, Chief Executive of UK Finance

“At a time when there is still much uncertainty about the nature of the UK’s relationship with the EU and the impact this will have on future cross-border trade this was rightly a Budget focused on investing in UK plc.

“Today’s announcements start addressing some of the challenges in our housing market and their focus on improving supply of new homes is welcome. The finance industry has campaigned for Government to support smaller housebuilders so today’s new guarantees go a long way in helping make this a reality. Removing stamp duty for all first time buyers up to £300,000 will help ensure the UK has a housing market which can meet the aspirations of that important group and contribute to the health of the wider economy.

“For business, an ‘Action Plan’ to unlock over £20 billion of new investment in UK-based high growth and scale-up firms, in conjunction with £500 million to support tech initiatives, will provide a significant lift for the UK’s economy.”

Not the bold, game-changing Budget

Azad Zangana, Senior European Economist at Schroders 

“The headline from the Budget will be the large downgrades to the UK’s future path of Gross Domestic Product (GDP) and productivity growth. The Office for Budget Responsibility (OBR) has downgraded its forecast for real GDP growth in each year of the forecast, with nominal GDP 2.5% lower by the end of the forecast horizon. This naturally led to a higher forecast for borrowing in coming years, with most of the Chancellor’s headroom removed.

“There was a small net fiscal giveaway in this Budget too from the Chancellor, with most funding directed towards the National Health Service (NHS), measures to encourage greater investment, and housing. The NHS and housing had to be targeted by the Treasury as the public considers both these areas to be in crisis.

“While the Chancellor’s efforts to boost housing supply should be welcomed and are long-overdue, the scrapping of stamp-duty for first time buyers (the majority of buyers in the market at any point in time) will simply serve to distort property prices further. Indeed the OBR has said that it does not expect the policy to help first-time buyers, but will help sellers.

“Overall, this was not the bold, game-changing Budget that many in Chancellor’s own party were demanding. However, the Chancellor’s giveaways may just about be enough to satisfy the headline writers, and keep him in his job for now.”

Definitely a case of ‘every little helps’

Lucian Cook, Savills head of residential research

“It is encouraging to see so much focus on housing in the Budget, with a combination of carrots and sticks designed to boost housing delivery, including to encourage developers to build out more quickly, build more densely, boost land release, etc.

“The one demand-side initiative, the stamp duty cut for first time buyers, is the one measure that comes into effect immediately, while it will take time for the supply-side initiatives to bear fruit.

“Even greater ambition and immediacy is needed on the supply-side if we are going to make real progress towards solving the housing crisis.

Stamp duty change: abolished for first time buyers up to £300,000

“This is definitely a case of ‘every little helps’. It isn’t possible to borrow against stamp duty, so this will temper some of the pressure on first time buyers at the time of completion, but does not impact the real challenge – that of the deposit requirement, particularly in higher value markets. This may just encourage the bank of mum and  dad to help out more, safe in the knowledge that their cash is not going to the Treasury.”

This article was first seen on PrimeResi

Published 24 Nov 2017 by Georgina Rabl

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