Agents across the country felt largely disappointed by the relatively few proposals relating to housing which were announced in this year’s Autumn Budget. Some estate agents feel that nothing is being done to improve low transaction levels, which are not only bad for the market, but which could prove even more disastrous for the wider economy. With the rapid expansion over the last few years of the private rented sector, increased support provided to Generation Rent would have been positive news, such as the sale of rental homes to long-term tenants.
On the whole, many industry professionals found the budget to be disappointing from the residential housing perspective, with the Chancellor choosing to pass on opportunities to build momentum and take ground from Labour concerning privately rented property.
The key measures included capital gains tax lettings relief reformation. Lettings relief raises the gain provided by CGT when a property is sold by a taxpayer. However, lettings relief will now only be applicable if the owner lives in shared occupancy with a tenant from April 2020. This will encourage an increase in lodging with home owners, but will reduce the usage of separate property for short lets.
As the demand for privately rented properties rises, supply is shrinking, and it is thought that a pro-growth taxation measure would ensure that renters are provided with a supply of properties to choose from. Despite being provided with innovative suggestions to help protect tenants in their rented homes, improve energy efficiency and encourage sales to tenants, there was little more than a promise of further consultation within the Autumn Budget.
Many are also surprised that the Government did not declare tighter control of short term tenancies. Although this sector gives the economy a boost, it has rapidly grown in recent years, and vastly affects the lettings sector, with many arguing that now is the ideal time to introduce regulation.
Stamp Duty relief extends to shared ownership for first time buyers. Rather than focusing on first time buyers, industry experts have urged the government to focus on last time buyers and their crucial role in the housing supply chain. Releasing older home owners from stamp duty would provide them with the freedom to move, while bringing more detached family homes to the market. Estate agents also claim that it is not enough to change the wider issue of lack of affordable properties, rising house prices and supply of homes in the UK.
Stamp Duty surcharge for foreign buyers at one per cent. Beginning with a consultation in January, the Government has changed its original stance of three per cent for foreign buyers. However, many are worried of the effects of this measure to the already fragile housing market in London, where it could cause more problems for developers.
Help to Buy extended until 2023 for first time buyers. Industry experts have hailed this measure as a sensible one, as the scheme for Help to Buy is restricted to only first time buyers, with price caps set regionally. 81 per cent of Help to Buy loans have been for first time purchases since 2013, and from 2023, the onus will be on the development community and mortgage lenders to enable buyers to bridge the gap.
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