Autumn Statement - Chancellor Announces Housing Measures

Monday 28 November 2016

During his Autumn Statement last week, Philip Hammond pledged to respond to the UK’s housing crisis, with the focus very much on housing provision, affordable homes and higher Stamp Duty Land Tax costs for the purchase of additional residential properties.

Promising to double its annual spend on housing, the Government made a strong case to address the current chronic shortage of homes. Setting out his plans for investment, Hammond announced a £2.3 billion housing infrastructure fund for up to 100,000 new homes and an additional £1.4 billion towards 40,000 new affordable homes.

NAEA MD, Mark Hayward, comments:

“The measures announced during the Autumn Statement to boost house-building go some way to making the housing market work for everyone, but quite frankly do not go far enough. The Housing Instructure Fund, as well as the fund to build 90,000 affordable homes in London will act as catalysts to start closing the gap between supply and growing demand, but what we really need to see now is properties being built quickly. The Government has a long-standing history of announcing numerous house building pledges, but in the last few years, we’ve not seen a sufficient impact on supply to make a dent in providing the affordable homes we really need. The detail in the Housing White Paper will be crucial – let’s hope there are far more detailed plans in there when it is released.”

Whilst Hammond’s plans for home building have been welcomed by the sector, the issue of high stamp duty fees is still a major area of concern. With stamp duty takings for 2016 £1.6bn less than expected and financial predictions for next year set to increase by £2bn less than predicted, questions are being raised as to whether the escalating costs to fill this black hole are stagnating the sales market.

Martin Walshe, Director, Cheffins Residential Sales comments:

“In the midst of reports of Mr Osborne’s changes having cost the economy over £1bn due to the reduction in selling homes, it has been a shock that Hammond hasn’t tackled this ‘tax on mobility’ as a priority. For too long excessive stamp duty has stifled the property market causing a constriction on transaction levels and spiralling prices. The decision not to cut this excessive tax rate will mean that the market continues to stagnate, with prices increasing due to a lack of stock on the market.

The long and short of it is that the increase to SDLT made by Mr Osborne back in 2014 hasn’t worked and rather has become a vehicle for the government to penalise the smaller housebuilders, parents buying for children, private landlords and those with a home overseas. The entire housing industry is looking for stabilisation of prices with measured increases year-on-year, rather than the bottleneck of pricing which has been particularly prominent across the Eastern region.”

The Government has amended the guidance on Stamp Duty in accordance with the planned changes.

OTHER ANNOUNCEMENTS AFFECTING BUSINESSES:

  • Letting agents are to be banned from charging tenant’s fees
  • A relaxation in restrictions on grant funding to allow providers to deliver a mix of homes for affordable rent and low cost ownership
  • Minimum wage will increase from £7.20 to £7.50 in April 2017
  • Insurance Premium Tax will increase to 12% from June 2017
  • A housing Whitepaper will be published in January 2018
  • The Government will invest over £1bn in the country's digital infrastructure to catalyse investment in fibre networks and 5G trials
  • Fuel duty will remain at current rates
  • Personal allowance will reach £12,500 and the higher rate threshold will increase to £50,000 by the end of this parliament