Today’s Budget was noticeably lacking in any further information on government plans outlined in its recent Housing White Paper and missed the chance to ease the stamp duty burden on first-time buyers.
Instead, there were just minor tweaks to announcements made in previous Budgets. The government announced that it would delay the reduction in the filing and payment window of stamp duty until 2018-19. Buyers will still have 30 days to file and pay their stamp duty – this was to be cut to 14 days in 2017-2018 but, after consultation, this cut is being delayed for a year.
The government also announced that it plans to consult on proposals to redesign rent-a-room relief, to make sure it is better targeted to support longer-term lettings. This is to make sure this tax relief meets its original goal of increasing supply of affordable long-term lodgings.
There was bad news for offshore property developers: with immediate effect, the government is amending legislation to ensure that all profits realised by offshore property developers developing land in the UK, including those on pre-existing contracts, are subject to tax.
Commenting on the lack of property coverage in the Budget, Paul Smith, chief executive of haart estate agents, says: “Today’s Budget marks another missed opportunity to create fundamental reform to the UK’s long-suffering property market.
“The Housing Minister merry-go-round has left housing issues at the periphery of government thinking and strategy. Continually kept at an arm’s length, they’re incapable of tackling the deeper-seated issues within housing market – leading to a plethora of initiatives that that tamper with rather than tactically reform the market.
“While it’s good to see the government committing to increase funding for infrastructure – including more school places, which will certainly increase house-builders’ appetites – what we really need to see are stamp duty holidays and tax reliefs to increase investment opportunities, expanding the pipelines of housebuilders and introducing fluidity into the market.
“The Chancellor today said he wanted to ensure the next generation to have the same opportunities to fulfil their aspirations – but clearly this does not extend to homeownership.”
No help for first-time buyers
Glynis Frew, chief executive of Hunters Property plc, adds: “The real underlying issue in the housing market is affordably priced homes. The recent Housing White Paper proposed more starter homes for first-time buyers; we were keen to hear more on how and when these homes will come to fruition.
“The White Paper also discussed releasing land to build, which again is fundamental to helping the housing market. When demand is high and supply is low due to lack of building this drives prices up. It would also have been beneficial for the Chancellor to expand on this.”
“It was unsurprising, but still a shame, the Chancellor did not address the issues with stamp duty. Stamp duty should be slashed for first-time buyers, it is absurd to think first-time buyers in London and the South East are finding themselves in the third tax band and are therefore paying a whopping 5% when first stepping on to the ladder. It is no secret there are fewer first-time buyers entering our market than ever before and this, unfortunately, has a knock-on affect for second steppers and further up the ladder.”