Despite calls for property market incentives, the chancellor has resisted changes to SDLT and Inheritance Tax and instead focused on national insurance and business rates relief in the Autumn statement.
There have been calls for amendments to SDLT with people in the industry giving a divided response. The ongoing discussion centres on whether it should be completely abolished or restructured to address various challenges and controversies.
The Autumn Statement included, however, a reduction in National Insurance contributions for a substantial portion of the workforce. Additionally, the statement introduced a decrease in corporate taxes and the implementation of stricter penalties for certain welfare benefits.
The Chancellor revealed a set of initiatives aimed at stimulating business investment, amounting to an annual increase of £20 billion, as part of efforts to foster economic growth in the United Kingdom. Tim Bannister, Rightmove’s property expert commented:
“Stamp Duty was changed as recently as a year ago, albeit only temporarily until March 2025, so further changes so soon would seem unlikely. Further cuts or a permanent change to the thresholds would be welcomed by many, particularly by affordability-stretched first-time buyers. However, further stamp duty cuts are unlikely to lead to a rush of activity, as buyers would need to weigh up any benefit in savings against higher mortgage rates and their monthly mortgage payments.”
Also in the Autumn Statement, Hunt has committed to reforming the planning system to allow for faster planning applications – saying he will “allow local authorities to recover the full costs of major business planning applications, in return for being required to meet guaranteed faster timelines”. Commenting on the Autumn Statement, Andy Sommerville, Director at Search Acumen, the property data and insight provider, said:
“The Chancellors Autumn Statement has provided some clarity around the Government’s plans in the near future, setting the stage for what could be their final curtain call before another election is called in 2024. Following a testing economic year across the board battling inflation and rising interest rates, there has been mounting pressure for the Chancellor to ease the highest tax burden the UK has seen in more than seven decades. Sceptics will have watched Hunt announce tax reliefs this afternoon considerable astonishment, and certainly the business community welcomes any measures to stimulate growth as we head into a new year.
The Chancellor’s announcement of some reform to our ailing planning application process will be positively received across the board by the property industry. Whilst this is largely focused on infrastructure, it paves the way for more reform in the near term by the current Government. There has been an unprecedented planning backlog in the last few years, fuelled by Covid, but kept ablaze by inefficient systems that have notably held back developers from progressing with much needed construction across both the residential and commercial sectors. Providing local authorities with monetary incentives to cut planning application timescales is an encouraging step in the right direction. An investment of £50m into the system is the step the industry needed after feeling deflating by yet another turntable of housing ministers.”
Tim Bannister, Rightmove’s property expert said that the lack of housing announcements “feels like a missed opportunity to help home-movers and home-owners today, given the challenges this year with higher mortgage rates”. He continued:
“Affordability-stretched first-time buyers in particular will be feeling forgotten, as they try to get onto the ladder with increasingly squeezed budgets and reduced support options. We hope the government will consider other measures to help the market in the spring budget.”
What’s more, Nicola Gooch, Planning Partner at Irwin Mitchell said that the ‘prompt service or your money back’ guarantee does “not appear to relate to residential planning applications, so will likely only affect a very small proportion of planning applications in any one local planning authority”. She added:
“If these changes to planning fees are limited to non-residential applications, then there could be unintended consequences. It could result in commercial applications being prioritised over housing schemes, where the planning application fee would not be set on a costs recovery basis and the risk of a refund would be lower.
We have also been promised yet another consultation on new permitted development rights. This time to allow the conversion of a house into two flats if there are no changes to exterior of the building. This will continue a long-running trend of expanding the scope of permitted development rights in England and will add to the eleven planning related consultations that we have had in the last twelve months – most of whom are still awaiting a response. The promise to cut grid access delays for renewable projects will come as a huge relief to the sector, but whether financial incentives will make residents more accepting of new transmission infrastructure remains to be seen.”
Joe Pepper, CEO of PEXA UK said that with “no dedicated policies on the horizon to boost property transactions, for homebuyers and homeowners, this Autumn Statement provides little relief” He continued:
“Those having to remortgage imminently will most likely be forced to pay far more than they do now, despite mortgage rates beginning to fall. This is only going to exacerbate existing affordability problems. Many buyers will be waiting for fixed rates to become more competitive before progressing purchases, even with lower deposits and a green incentive on offer.
We remain hopeful that the rate of inflation will continue to fall, so that mortgage rates continue to fall in line, at which point we expect to see property transactions rebound. The current quiet period is the ideal time for the industry to come together and embrace the kind of technological innovation which will significantly improve the markets’ ability to scale and grow capacity in the months to come. This is going be key in transforming the property market, reducing friction and improving customer outcomes.”
On another note, in response to the £3 million investment in the home buying and selling process announced in today’s statement, Stephen Ward, Director of Strategy at the Council for Licensed Conveyancers said:
“Implementing new approaches and adopting tech solutions that can deliver a better, faster and more secure home-buying process that supports more consumer confidence is what the industry needs to move forward. This is a very important signal from the Chancellor that the government is serious about the need for reform. Across the property sector we have it in our power to make those reforms by working together through the Digital Property Market Steering Group and Home Buying and Selling Group.”
The BBC also reported that Hunt says the government will invest £500m over the next two years to fund more “innovation centres” to help make the UK an “AI powerhouse”.
