The long-awaited Autumn Budget was announced by Chancellor Philip Hammond today outlining a number of key points affecting the housing market.
After Sajid Javid, Secretary of State for Communities and Local Government addressed mounting concerns over what he called ‘the broken housing market’ the budget was eagerly anticipated.
Points include Stamp Duty being permanently abolished for first-time buyers purchasing properties up to £300,000 effective immediately. To help first-time buyers in London and other expensive regions, the first £300,000 of the cost of a £500,000 purchase by all first-time buyers will be exempt from stamp duty.
This will benefit 95% of all first-time buyers, with 80% not paying any stamp duty.
It was also announced that local authorities will now have the power to charge a 100% council tax premium on empty properties.
The Chancellor also announced that a consultation will be launched on barriers to longer tenancies and how the government might encourage landlords to offer them to those tenants who want additional security. This is perhaps the most relevant point for the private rented sector.
Eddie Hooker, CEO of mydeposits says: “It goes without saying that we welcome the consultation on longer tenancies and we will be very interested to see what these barriers to longer tenancies are. As providers of tenancy deposit protection, our data suggests that tenancies are lengthening. Our members seek happy tenants who pay their rent on time, keep the property in good condition and want to live in the property long-term.”
Over the next five years, the government will commit £44 billion of capital funding, loans and guarantee to support the housing marketing. This is somewhat lower than the £50 billion requested by the Sajid Javid to tackle the housing shortage, but will still make a significant contribution. This funding will help to deliver 300,000 new homes on average each year by the mid-2020s. A further £2.7 billion will also be invested which will more than double the Housing Infrastructure Fund.
Other announcements include the government investing £28m in three new “Housing First” pilots in the West Midlands, Manchester and Liverpool in response to homelessness in a bid to halve rough sleeping by 2022 and eliminate it by 2027.
An interim report will be released in time for the Spring Statement next year to understand why there is a significant gap between planning permissions and the number of homes being built.
The Autumn Budget statement can be found in full here.
Check back soon for the next episode in the Hamilton Fraser podcast series where Eddie discusses the Autumn Budget in more detail!