As part of George Osborne’s budget announcements, the UK Government has said it intends to ask for evidence on how to make the house buying process better value for money.
Citing as yet unpublished guidance from he Department for Business, Skills and Innovation, the detailed budget announcement read: “Consumers spend £270 million each year on failed housing transactions.
“The government will shortly publish a call for evidence on how to make the process better value for money and more consumer-friendly.”
The government also announced reforms to planning and other measures aimed at tacking the nation’s housing crisis.
The announcement went on to say: “The government has undertaken a series of reforms to streamline and simplify the planning system. Annual housing starts are now at an 8-year high and planning permission was granted for more than 250,000 homes last year alone. Further reform is needed to deliver the government’s commitment to deliver 400,000 affordable housing starts by 2020-21, while continuing to protect the Green Belt.
“Budget 2016 therefore announces:
- “The government’s intention to move to a more zonal and ‘red line’ planning approach, where local authorities use their local plans to signal their development strategy from the outset and make maximum use of permission in principle, to give early certainty and reduce the number of stages developers must go through to get planning permission
- “Measures to speed up the planning system, including minimising the delays caused by planning conditions, and ensuring the delivery of local plans by 2017
- “A consultation on options for increasing transparency in the property market, including by increasing the visibility of information relating to options to purchase or lease land.”
Paul Smith, CEO of haart estate agents, said: “The country’s housing shortage can only be solved by boosting the supply of new homes, and the government could have gone further in making this a priority. While the Lifetime ISA is a positive step forward that will make it easier for people to save for a deposit on a home, more should have been done to bring housebuilding into greater focus. In his budget, George Osborne claims to put the next generation first, but this missed opportunity means that the supply of homes will continue to be low, leading to greater pressure on prices, which will largely affect first time buyers in the majority.
“Frustratingly today’s budget was also a missed opportunity to look again at stamp duty on residential properties, which is one of the biggest issues currently affecting the lack of supply. The most recent changes have only served to hold back the sale of higher value properties, which has a knock on effect on the supply of homes across the entire market and prevents people from moving up the chain. The Government needs to encourage downsizers and a stamp duty holiday for those in this market would be just one key measure to stimulate the supply of larger family homes.
“In the buy to let sector we have seen a surge in purchases ahead of the extra 3% stamp duty for landlords being introduced in April, but we’re now likely to see a significant fall in buy-to-let purchases as soon as the new measure is introduced. That might result in a levelling out of prices but it will also mean less investment into new build buy-to-let properties, which is essential for anyone who cannot afford to buy, especially in London. Tenants are likely to be the biggest losers as landlords pass on the increased costs through rent rises.
“The property market appears to have been spooked by uncertainty around Brexit in the last month, with fewer people selling, and this was the government’s chance to support the residential market. But they have done little that will increase the supply of homes for sale in the short to medium term.”
The detail on SDLT reforms was also published: “As part of the government’s commitment to support home ownership and first-time buyers, the Autumn Statement 2015 announced that from 1 April 2016, higher rates of Stamp Duty Land Tax (SDLT) will apply to purchases of additional residential properties, such as second homes and buy-to-let properties. The higher rates will be 3 percentage points above the current SDLT rates and will apply to purchases of additional residential properties in England, Wales and Northern Ireland.
“Following consultation, the government has decided: to help those moving in difficult circumstances, purchasers will have 36 months rather than the originally proposed 18 months to either claim a refund from the higher rates or before the higher rates will apply, in the event that there is a period of overlap or a gap in ownership of a main residence.
“There will be no exemption from the higher rates for significant investors, and the higher rates will apply equally to purchases by individuals and corporate investors The government will provide £60 million of the additional receipts from higher rates on additional residential properties to enable community-led housing developments, including through Community Land Trusts, in rural and coastal communities where the impact of second homes is particularly acute.”