Several property industry commentators have made clear their disappointment with Chancellor Jeremy Hunt’s budget on Wednesday with the set of policies described as one of “missed opportunities”.
First-time buyers
“The nation’s first-time buyers are currently tackling the highest cost of homeownership on record and it’s bitterly disappointing to see the government turn their back on them yet again,” said co-founder and CEO of Wayhome Nigel Purves, adding:
“Having afforded them some brief stamp duty respite during the pandemic, they clearly feel their job is done and have now left them out in the cold to fend for themselves.
While we certainly weren’t expecting another stamp duty reprieve, nor do we believe these intermittent discounted buying costs are the answer, a commitment to at least building more homes would have been a start.”
However, a positive angle was offered by Adrian Anderson, Director, Anderson Harris, who said the expansion of free childcare “will make unmortgageable families mortgageable”:
“Childcare fees of potential borrowers are scrutinised by the banks and have a real impact on the affordability capacity for those seeking mortgages. Childcare fees were making some families unmortgageable.
This expansion of free childcare in 2024 will make unmortgageable families (due to childcare costs), mortgageable, enabling them to get on the ladder or secure the right property to meet their needs.”
Housebuilding targets
“The lack of any tangible announcements in today’s budget to help stimulate the housing market, both residential and buy to let, is a concern,” said Nick Chadbourne, CEO at LMS, who added that, following the “turmoil” of 2022, the market “needs to be addressed on a broader level”:
“That necessitates helping people get onto the property ladder by increasing housing stock – this will ease the pressure on the rental sector while also improving the affordability across the board, especially for first time buyers. It’s not necessarily an easy task, but we can start by loosening planning restrictions, and changing the punitive measures on landlords that are driving them out of the market altogether.”
CEO of Alliance Fund Iain Crawford echoed Chadbourne’s sentiment, noting the lack of new housing targets was “disappointing”:
“There’s been a severe lack of new homes reaching the market in recent years and so you would have hoped the issue of housing supply would have been higher on the agenda.
Instead, it seems as though the government has chosen to throw in the towel with no new targets set and this certainly isn’t going to help solve the housing crisis.”
Head of Corporate Partnerships at Sirius Property Finance Kimberley Gates added:
“Rather than address the housing crisis head on, the government has chosen to shy away from the issue, relinquishing any accountability by failing to set new housebuilding targets.
This hands off approach is sure to see the already inadequate level of new homes reaching the market decline even further. For homebuyers, this means less choice, higher prices and an even tougher task when attempting to climb the property ladder.”
Levelling up
Managing Director of Stripe Property Group James Forrester commented:
“While we certainly need a better balance of investment across the nation, the Levelling Up Fund has so far been lopsided, to say the least.
As it stands, the North West has seen a substantial amount of investment, while the North East has been largely ignored. So, today’s news that the region will benefit from the next round of investment is, of course, positive for the regional economy, along with the economies of the other areas earmarked to benefit.
However, we can be forgiven for holding our breath until we know for sure just how the latest £80bn has been allocated and which areas of the nation stand to see the largest boost.”
Wider measures announced in the budget
- UK to avoid entering recession in 2023, says the Office for Budget Responsibility (OBR)
- Inflation set to fall to 2.9% by end of 2023 – it currently sits at 10.1%
- Fuel duty will remain frozen and the 5p reduction is set to stay
- Government debt to fall every year until 2027-28. Government currently operating in budget surplus
- Annual tax-free allowance for pensions will be increased from £40,000 to £60,000 alongside the abolition of the lifetime allowance
- UK described as “best country to invest in after United States and China” and one of the best places in the world to do business
- Overall tax burden to be slightly lower than previously predicted by the OBR
- £600 for new childminders plus free childcare up to 30 hours per week to be extended to every single child over the age of nine months. Also improved childcare access for those on Universal Credit
- 12 investment zones – “potential Canary Wharfs” – to promote levelling up
- £8.8 billion for local transport funding
- Investment allowance for small businesses upped to £1 million
- SMEs able to claim £27 back for every £100 spent on R&D
- AI sandbox to trial new, faster approaches to help innovators get new products to market. Also working closely with Intellectual Property Office and backed by £900 million funding for implementation
- Children in care: qualifying care relief upped from £10,000 to £18,000
- Cut corporation tax by £9 billion per year
- New measures to encourage over-55s back into work