Call for Chancellor to scrap Osborne’s reforms in Autumn statement
Government should be addressing real housing issues rather than consulting on changes to SDLT filing and payment processes, says SLC
The Society of Licensed Conveyancers (SLC) has called on the Chancellor Philip Hammond to reverse George Osborne’s damaging attacks on the private rented sector to help stimulate the housing market. The reforms, which took effect in the spring, have had a significant impact on property investment with a consequent impact on the whole property sector.
Simon Law, Chairman of the Society said: “In spite of some trying to talk the market up, there is no doubt that transaction levels and new housing building are being adversely affected by a number of factors. While some people point at uncertainty created by Brexit, it is the Society’s belief that Osborne’s punitive and unnecessary reforms to the taxation regime associated with private sector property investors and landlords have been the main cause. The reforms have also caused enormous confusion for property purchasers and their conveyancers, particularly in respect of SDLT, resulting in frequent delays and even transaction failure.”
“There is a real and significant opportunity for the new Government under Teresa May to unlock economic growth very quickly by simply reversing the Osborne reforms in the Autumn statement. There is no doubt that a robust property sector can help allay any fears of an economic downturn if swift action is taken, “ Law added.
Eddie Goldsmith, Chairman of The Conveyancing Association, says: “I think many would agree that we’ve seen rather more than a traditional, seasonal housing market drop-off over the summer – the latest figures from the Bank of England show that mortgage approvals continued to fall with their value down to £17.7 billion in August from £19.2 billion in June. The impact of the 3% increase in stamp duty charges for additional properties has been sizeable and we’ve seen considerable falls in buy-to-let purchase activity although remortgaging has improved.
“The anticipated boost George Osborne’s measures were supposed to give to first-time buyers appears not to have materialised. The latest figures from the CML show that landlord borrowing was 21% down year-on-year in July, while first-time buyers’ borrowing was down 19% month-on-month, and 4% year-on-year – hardly the renaissance in first-time buyer activity we were led to believe would result from buy-to-let activity being forced downwards.
“When you add in the uncertainty wrought by the result of the EU referendum, the impact across the entire housing market is sizeable. Transaction levels have dropped over the past few months, the market is subdued to say the least and this clearly impacts on the conveyancing sector.
“While we’re anticipating that the market will improve slightly throughout the Autumn, the industry would undoubtedly benefit from a reappraisal of those measures by the new Chancellor in his first Autumn Statement. It may be too much to hope that the 3% extra charge on additional property stamp duty will be abolished, but such a move – as well as a u-turn on next year’s mortgage interest tax relief changes – would be most welcome, sending a clear message that the private rental sector (and those active within it) are not the enemy, whilst breathing much-needed new life into the UK housing market.
“This represents a pivotal moment for the UK housing market because the anti-landlord and investor policies that have been introduced, plus the result of the EU referendum, has led to something of a perfect storm which (if allowed to continue) could reduce transaction levels to rubble for many months to come. Theresa May’s ‘new’ Government and Philip Hammond therefore have an opportunity to make a significant intervention that would benefit all stakeholders. We would urge them to take the appropriate action required to support a market which is absolutely pivotal to the health of UK plc.”
The SLC calls on other property stakeholders to back this call on the Chancellor, for the benefit of all property investors and landlords and ultimately their renting tenants. Investment leads to construction, and a greater supply of housing serves to keep rent levels in check.