Housing Market Experts Respond To Spring Statement
The Spring Statement announced itself by declaring the financial promises do not amount to a budget with a number of housing measures being suggested to improve the broken housing market.
In particular, the government will guarantee £3 billion of borrowing to housing associations across the UK to fund the Affordable Home Guarantee Scheme which will deliver 30,000 homes.
Overall, a £5.5billion Housing Infrastructure Fund to help create 37,000 homes.
Impacting on so many areas of the housing market, a plethora of organisations have responded to the recent promises to the housing sector.
Iain McKenzie, CEO, The Guild of Property Professionals, said: “Aside from announcing a new £3 billion Affordable Homes Guarantee scheme, the Spring Statement didn’t deliver much for the property market, which was expected given the lack of stability in the political arena and the no-deal Commons vote later today. What is needed are measures to improve consumer confidence as the fundamental issue that is holding the housing market back is Brexit and poor sentiment as a result, particularly evident in London and the South East. Other areas around the UK have not been as affected and people that need to move are doing so successfully. Transactions levels have dropped year on year, but only very marginally so the perception of a ‘failing market’ is not quite reality when you look at the bigger picture.
“If we leave the EU with a no-deal then some people may continue to delay moving as they wait and see what happens in the market. House prices and transactions could fall further in some areas, but not by much and the impact will only be short-lived as the current uncertainty begins to lift.”
Mark Hayward, chief executive of NAEA Propertymark, commented: We support anything which serves to increase the supply of housing stock and improve accessibility for first-time buyers (FTBs) who have been increasingly priced out of the market over the last five years. Demand for housing continues to rise, and the number of new homes currently being built isn’t enough to fill this void. Coupled with the fact that the buying and selling process is lengthy and expensive, there’s no incentive for homeowners to move. This means people are staying in their first properties for longer and consequently, there’s a severe lack of affordable housing, so we wholly support the measures announced today. However, in terms of annual transactions, 30,000 affordable homes simply isn’t enough to fix the broken housing market. More needs to be done.”
John Phillips, group operations director at Just Mortgages and Spicerhaart said: “The chancellor has just announced in the Spring Statement that 60,000 first time buyers have benefitted from the stamp duty relief since it was announced in the Autumn budget.
“At the time, I welcomed this move, as stamp duty is one of the biggest barriers for first time buyers entering the housing market. And I think that the chancellor needs to look at the positive impact this has had on first time buyers and do something similar for last time buyers.
“Many older people who want to downsize – either to release cash from their properties, or to move to a more suitable home – are put off because stamp duty makes even downsizing a costly exercise, and this is one of the reasons why equity release is becoming so popular. We know the housing market is struggling at the moment, so we need to open up incentives for people already on the housing ladder as well as those looking to take their first step into order to get things moving again and give second and third steppers more confidence in making that next move.”
Phil Hall, Head of Public Affairs & Public Policy at Association of Accounting Technicians, commented: “The Chancellor was right to highlight that an additional 220,000 new homes have been built as this is certainly helpful in controlling house price inflation.
“However, it was disappointing to again hear the promotion of the First Time Buyers (FTB) relief which although helping 240,000 FTBs, has done so at a staggering cost of £600m to the taxpayer.
“As AAT has repeatedly highlighted, this scheme is costly and bureaucratic and should be scrapped in favour of simply switching Stamp Duty liability from the buyer to the seller.
“Switching liability is a cost free alternative that would save the taxpayer hundreds of millions of pounds; protect existing revenue streams; ensuring every FTB was free from Stamp Duty whilst helping tens of thousands of other home owners who are moving up the property ladder – by ensuring they pay a lower sum on the house they are selling and not the house they are buying.”
Melanie Leech, chief executive of the British Property Federation, said: “As the Chancellor rightly identified, the threat of a disruptive and damaging ‘no deal’ Brexit hangs over the UK economy, and removing that shadow from day-to-day investment decision-making is the singular most important challenge that Parliament must resolve.”
“Self-driving and electric vehicles offer opportunities to address problems such as air quality and the provision of enhanced mobility to urban places without the necessity of owning a car, as well as providing insights through connected mobility data on consumer habits and demographics. We look forward to responding to this consultation.
“As our research in the Liquid Report and Lost in Translation showed, digital models of buildings and cities can elicit significant benefits in terms of ensuring that the UK real estate sector can capture the benefits of advances in technology, and these benefits extend beyond just the construction and real estate sectors to touch all aspects of the economy.
“More spending for R&D is to be welcomed, particularly when these concern grand challenges such as AI. However, as the Liquid Report released last week indicated, there is a greater need for real estate-focused innovation competitions and research. There are particular challenges that are common across many real estate companies, such as data sharing, that would benefit from Government’s role as convenor and arbiter.”
Ian Fletcher, director of real estate policy at the British Property Federation, commented: “We have significant concerns around Land Value Capture, which threatens to hold back the delivery of new development and prevent the Government from meeting its target to deliver 300,000 homes-a-year. We are pleased that Government remains focused on existing land value capture measures, rather than adding new ones.”
“The property industry has supported some permitted development rights in the past, not least office to residential, and will continue to support sensible reform in this area.
“However, we are concerned that PDR proposals that allow building up on top of existing property, and that allow properties to be demolished and rebuilt, may not lead to well-planned places, and may be so complex to bring forward they simply resemble a planning application in all but name. Similarly, a PDR that allows hot food take-aways to be turned in to homes may lead to poor-quality development.
“The proposed flexibilities around change of ‘A’ class uses also need further careful consideration. High streets need a holistic and locally-driven approach and while greater flexibility within use classes would be welcome, each high street has different characteristics and different challenges, so our approach to planning on high streets has to be nuanced rather than a one-size-fits-all approach.
“We would rather see local councils engaging proactively in planning and adaptation and therefore we support much of the Government’s high street agenda, including the High Street Fund and Task Force. Greater use of compulsory purchase and local development orders is also something which local councils may need to deploy more and support for that is welcome. The extension of temporary use from two years to three, and the encouragement this might give to more community uses and would-be entrepreneurs, is also welcome.”
“There are some welcome investment announcements in today’s Statement that allocate funding already earmarked for housing. The Housing Infrastructure Fund allocations of £717m will help unlock some important strategic sites. The first Affordable Housing Guarantee Scheme was a roaring success and we are pleased to see a further £3bn now confirmed.
“Speeding up planning is a laudable aim, but to do so will require additional capacity and capability within local authority planning departments.
“The development sector has tried to help meet this shortfall through higher planning application fees, which came into effect at the start of 2018, but it is also important that local government is properly funded and it desperately needs a more sustainable funding settlement as part of the forthcoming Spending Review.”
“In the short term, the priority must be to provide certainty to overseas investors in UK real estate that the ‘rules of engagement’ will not change overnight. In the longer term, the question will really be ‘to what extent does the UK continue to align its financial regulation with the EU?’ This will depend on whether the UK wishes to be recognised as having an ‘equivalent’ regime to the EU, to which the answer must surely be ‘yes’ – at least until the future of the UK’s broader relationship with the EU is clearer. However, this means the UK will probably be in the position of ‘rule-taker’ for the foreseeable future, which may cause political tension.”
“We support the Government’s proposals for mandating Biodiversity Net Gain through the planning and development process. This is an opportunity to preserve and enhance the UK’s natural environment, and while we would like to see significant gains by way of biodiversity, we must ensure that the proposals are achievable and viable across the spectrum of developments that contribute greatly to the country’s continued growth.”
“The real estate sector has made significant progress in improving the environmental performance of the UK’s built environment in recent years. To make further progress we will need to work in partnership with Government to acknowledge what has and hasn’t worked in the past. While we welcome the Chancellors announcement of a new Future Homes Standard to be introduced by 2025, we would highlight the significant challenges facing the UK’s existing building stock and encourage the Government to consider associated funding mechanisms in light of Green Deal financing no longer being available.”