Industry reacts to ‘bitterly disappointing lacklustre Budget’

Philip Hammond 620px

The long-anticipated Spring Budget delivered today left many in the mortgage and property industry wanting.

While Chancellor Philip Hammond may have delivered somewhat for adult social care and education, the absence of any mention of housing supply, first-time buyers or stamp duty was notable.

The general mood among commenters was one of disappointment.

Here is our round-up of some of their thoughts: 

“For all the talk of easing the pressure on affordability in last month’s housing white paper, Hammond’s Budget was underwhelming to say the least.

“By not raising the stamp duty threshold, the Chancellor has missed a valuable opportunity to improve access to the housing ladder for millions of aspiring homeowners in the UK, for many of whom the tax is the final straw when facing prices that continue to climb.

“Stamp duty is a significant barrier to liquidity in the market and any increase to the threshold would help to reverse the falling home ownership numbers and transaction volumes. I hope the situation is reviewed in the Autumn Budget.”

Landbay chief executive John Goodall

“Zip. Nada. Zilch… Nothing….

“A bitterly disappointing, lacklustre Budget by Mr Hammond in terms of addressing the current UK housing crisis. It is clear he is continuing the head in the sand approach of those before him in bypassing the issue, with a few headline-grabbing business initiatives and the usual proclamations about how great the economy is currently performing.  

“Ironic that a former property developer should give the subject such inadequate focus within his plans and woeful for those aspirational buyers on the ground still dreaming of getting on the ladder.

“The issue of housing has become the final coat of gloss on recent budget announcements, mentioned in passing to tick the boxes of a “well rounded” economic plan, but equating to little more than aesthetic fluff.

“A lot of focus on the NHS and how they are the party of the NHS. Does NHS stand for No Housing Speech?”

eMoov.co.uk founder and chief executive Russell Quirk

“We can’t help but feel that the government has missed an opportunity to address the relative unfairness of stamp duty in today’s budget.

“A review is now long overdue as it was last amended back in 2014, and it’s not just second and third time buyers who are being hit in the pocket. With house prices rising to a 10-year high, and the average property price heading towards £250,000, many first time buyers who would previously have been exempt, now find themselves incurring stamp duty costs too.

“Moving away from stamp duty, there’s another issue that we would like to see the Chancellor address. The growing cost of property, as well as the desire for a more flexible lifestyle, has seen more people opting to rent as a long-term solution. With this in mind, surely it’s time for a policy review on maximum tenancy terms? Personally, I’d like to encourage tenancies exceeding three years, to provide more stability to those renting. Coupled with the improved quality of housing stock on offer by the growing trend of Build to Rent, this would make the rental market even more robust.

“Many of us in the industry hoped that, with a new Chancellor at the helm, this would be the Budget to address stamp duty and the length of tenancy agreements but it seems it wasn’t to be. However, with another budget due in the autumn, perhaps Mr Hammond will take heed of our concerns.”

SDL Group commercial director Rob Clifford

“Today’s budget sees a real hit for small businesses and the self-employed. The cut in dividends and the rise in National Insurance payments equates to a tax hike, estimated by the BBC as being up to £2billion.  This could well hit both brokers and developers, many of whom are small businesses. The risk, where developers are concerned, is that where many invest their own money, they will now potentially have less money to put into new projects which will affect the amount they can borrow. 

“The worry is that this is the start of a trend of business bashing that the Chancellor is embarking on which could ultimately affect the level of development that takes place, with a knock on effect on the number of new houses built or refurbished by smaller developers – at a time when the Housing White Paper said that this is an area that the government wanted to expand.”

Hope Capital chief executive Jonathan Sealey CEO

“The Chancellor has passed up his last opportunity to reverse the damaging plans to restrict mortgage interest relief for landlords before they hit, or even to act on suggestions as to how he might ease the immediate impact.  Sadly, he still seems convinced by the Treasury’s analysis of the consequences, and it looks like he will only change his mind when the reality proves different. 

“That’s little comfort to the landlords who will be forced up a tax bracket as a result of the changes or potentially forced out of business, nor their tenants who will be faced either with higher rents or the struggle to find another home in an already pressured housing market.

“However, we’re pleased the Government has listened to our calls to delay the implementation of the Making Tax Digital programme as it has the potential to cause chaos as landlords struggle to get to grips with the demands of submitting quarterly tax returns online”.

National Landlords Association chief executive Richard Lambert

The government has for some time looked to address perceived inequalities in the income tax regime and adapt it to the changing ways in which people earn a living. We saw this last year with the changes to dividend taxation, which significantly increased the tax bill for many who paid themselves by drawing dividends from a limited company. The proposed reduction in the dividend allowance from £5,000 to £2,000 in 2018 will further increase these tax bills.”  

Investec financial planning team leader Simon Bashorun

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  • Des Platt 9th March 2017 at 5:47 pm

    No surprise there. The Tories are not the party for genuine businesses; they are the party for the half per cent who make money just by owing assets. Somehow, their press manage to con people that they have their interests at heart whereas really they have contempt for many of their own supporters.