WHO HAS THE BUDGET BLUES?
So now we know … sort of.
The Chancellor made lots of noises about the “broken” housing market in his Autumn Statement and there was much wringing of hands in Westminster about the need to help the “just-about-managing”.
But, despite a Housing White Paper – supposed to lay the foundations of a fresh Government policy – when it came down to it on Wednesday, the Chancellor actually said or did very little. Industry leaders’ calls for Stamp Duty to be paid by sellers not buyers were ignored and landlords’ appeals for a reversal of recent tax reforms relating to mortgage relief proved fruitless.
On the plus side, we still have Westminster’s commitment to build more affordable homes – even if it’s reneged a little on its building targets for 2020. Help To Buy, Help to Save and Lifetime ISAs are still available and the Rent A Room initiative remained in the small print, allowing homeowners to earn up to £7,500 a year tax-free by letting out their spare rooms.
But, on the down side, if Mr Hammond has listened at all to landlords’ concern that rents will have to rise to balance out extra costs of the recent clampdown on buy-to-let, there was no sign he’s been swayed by their arguments. There was also no mention of the proposed ban on letting fees, currently paid by tenants to cover the cost of their landlords’ admin.
At least, at first sight, it seemed there was no further direct assault on the domestic lettings market. But then landlords tempted to convert their portfolios into companies to side-step the new tax regime may now find themselves embroiled in Mr Hammond’s hike on taxes paid by the self-employed (https://www.estateagenttoday.co.uk/breaking-news/2017/3/budget-no-new-property-taxes–but-landlords-may-be-hit?platform=hootsuite).
So, all in all, Wednesday was, at best, underwhelming, and at worst a huge missed opportunity to finally signal an end to successive Governments’ short-termism on housing which has led us to where we are in 2017.
Unless there’s radical change when we swap back to an autumn Budget later this year, we seem set for at least another 12 months of house prices outpacing earnings, first-time buyers struggling to raise deposits and rents swallowing huge chunks of tenants’ income, making it almost impossible for them to save for a place of their own.
All sound a bit glum …? There’s no real disguising, if you’ve not yet got a foot on the property ladder, it is. But, if you’re already a homeowner, then maybe it’s not so bad. Your home is likely to continue to increase in value over the coming months, there’s no sign of a rise in interest rates just yet and, if you wanted to re-mortgage, there are still some great out there. Indeed, it looks like you’ll have at least another year to raise a glass to celebrate the fact you bought when you did.
(** For a comprehensive round-up of the Budget and its impact on the property market, we’d also suggest a read of our a blog written by our friends at Zoopla: http://www.zoopla.co.uk/discover/property-news/what-does-the-spring-budget-2017-mean-for-you/?utm_source=content&utm_medium=email&utm_campaign=zoopla-20170308-budget&utm_content=hero&utm_term=text#zwwOlMQaXWHmtYfJ.97)