Following Wednesday’s Autumn Statement, delivered by the new Chancellor, Philip Hammond, many experts in the housing, buy-to-let and financial sectors have spoken out about its effects on the UK property market.
But one sentiment seems to stand out more than any other: The Government still doesn’t really understand the UK property market.
Government Still Doesn’t Understand the UK Property Market, Insists Expert
While some believe that the Government has delivered yet more empty promises on housebuilding, others claim that the letting agent fee ban will force landlords out of the sector and raise rents, causing yet more difficulty for tenants.
Some believe that Hammond was wrong to leave further Stamp Duty reform out of the Autumn Statement, while others, predominantly tenant groups, have welcomed the lettings fee ban.
And the Managing Director of Nova Financial, Paul Mahoney, agrees that the ban may not be as detrimental as expected: “Some have viewed this as a negative, however, I believe it is a storm in a teacup. The fees aren’t generally exorbitant and it should encourage letting agents to be more efficient in the way they structure their revenue, as opposed to hitting tenants with fees they often can’t afford.”
He also claims that any expectation of a U-turn in the mortgage interest tax relief changes was “always a long shot”.
However, he adds: “The raising of the no tax threshold to £11,500 and the higher rate tax threshold to £50,000 will benefit mum and dad investors, who can split their rental income.”
But in terms of boosting the UK property market, was it all bad news?
Mark Lawrinson, the Regional Sales Director of Portico estate agent, explains: “The announcement of additional funding for affordable housing across the UK and new homes in areas ‘of high demand’ is good news for the housing market.
“The planned budget of £2.3 billion on infrastructure surrounding these homes is also a sensible move, but I cannot help but feel the Government still doesn’t truly understand the property market in the UK.”
He goes on: “The schemes the Government launch are typically geared toward the first time buyer, yet what we really need is a way of helping the second steppers move up the property ladder, which would stimulate the market, but also increase stock for first time buyers.
“If we found a way to encourage property owners to move, we would create both greater demand and greater supply. Ultimately, we need to enable the entire market to turn over – and as much as first time buyers are an important part of that, we can’t forever build starter homes. People need to move into bigger houses and different areas as their lives change, so the natural movement of the market needs re-establishing.”
He adds: “Further focus is also required on the red tape and processes surrounding building, and I believe this should be streamlined under one governing body, rather than individual local authorities. This holds up the development of sites through the amount of planning applications required, and more needs to be done on allowing sites – including brownfield sites – to be freed up for development.”