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SPRING STATEMENT 2018: THE REACTIONS

SPRING STATEMENT 2018: THE REACTIONS

by Dove & Hawk

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Article Credit: Prime Resi

CHANCELLOR REITERATES A “COMMITMENT TO TACKLE THE CHALLENGES IN OUR HOUSING MARKET”

 

Video Credit: BBC Website

Philip Hammond’s Spring Statement was never going to feature any big policy announcements or changes in Treasury direction – but there was a reiteration of the government’s focus on housing.

Alongside macro-economic updates, notable property-related points included:

  • Extra funding to diversify the house building market

£60m investment was pledged to boost the Housing Growth Partnership fund that supports small and medium sized housebuilders. Lloyds Banking Group have match funded to bring the total additional investment to £120m. The Partnership, launched in 2015, now stands to be worth £220m, delivering 3,400 homes. This money will help fund smaller builders to be able to invest in projects and develop their businesses – allowing them to recruit and train skilled workers and become more competitive in their area.

  • Extra funding to build affordable homes in the capital

A £1.67 billion funding package was promised for London – to build 26,000 more of the affordable homes. This contributes to a total pot for affordable housing in the capital of £4.8bn, which is meant to deliver at least 116,000 units for social rent, as well as homes for London Affordable Rent, flexible shared ownership and rent to buy. At least two-thirds of the homes built with this additional funding will be for rent.

  • West Midlands Housing Package

A £100 million funding boost to the West Midlands for a housing package to support the mayor’s target of delivering 215,000 homes by 2030 to 2031.


PRIME RESI INDUSTRY REACTIONS TO THE SPRING STATEMENT 2018

WE COULD NOT HAVE HOPED FOR A BETTER SPRING STATEMENT AT THIS TIME

James Bailey, Chief Executive of Henry & James

“Chancellor Philip Hammond has delivered a jovial but positive Spring Statement. This is good news for both the British economy and the property sector.”

“It was encouraging that the economy grew by 1.7% in 2017, compared to 1.5% forecast at the Budget.”

“More specifically, I was pleased to hear that an estimated 60,000 first-time buyers have benefitted since Stamp Duty for first-time buyers of homes under £300,000 was abolished in the 2017 Autumn Budget.”

“And I was delighted to hear that London will benefit from £1.67bn to build 27,000 affordable homes by 2022, while small housebuilders will benefit from funding of £220m. There is also additional support for small businesses and apprenticeships schemes. Again, encouraging for British businesses.”

“I was hoping for two things from today’s statement: consistency and continuity. Both were delivered by Philip Hammond in equal measures. We could not have hoped for a better Spring Statement at this time.”

“I remain positive about the future of the capital’s property market as Britain stands on an even stronger economic footing. For homeowners, London remains an attractive place to invest and the greatest city in Europe to live.”

WE SPRING INTO THE HOUSE BUYING SEASON WITH NO SIGNIFICANT SETBACKS FROM THE GOVERNMENT

Martin Bikhit, Managing Director at Kay & Co

“So, we spring into the house buying season with no significant setbacks from the government. This is positive news for both buyers, sellers and the industry as a whole. Economic conditions are showing some improvement, and the sun usually brings the buyers out, so we are ready to greet the season with optimism. Philip Hammond promised no red box, no official document, no spending increases, no tax changes. No other economy makes hundreds of tax changes twice a year, and neither should we, he said. For once, a politician is sticking to his word.”

MEASURED & SENSIBLE

Camilla Dell, Managing Partner at Black Brick

“We have a more measured and sensible Chancellor who is withholding his big announcements for the Budget this autumn. We see this in a positive light, as the London property market needs stability and to date there has been constant change and uncertainty. The pledge of £1.7 billion investment to build 26,000 affordable houses in London by 2022 is good news, however, pumping money into the market alone will not solve the problem. The Government needs to support Housebuilders and incentivise them to build the right type of accommodation Londoners need, in the right areas, at the correct price. A healthy market isn’t just about supporting the bottom end of the market. The volume of transactions taking place across all price points is also important. Stamp duty changes have crippled the London market, particularly in the prime and super-prime sectors, with volumes falling nearly 40% since stamp duty changes were introduced. At Black Brick we have experienced transactions being choked by stamp duty and we are keen to see a review of the stamp duty hikes bought in by the previous Chancellor, which we believe will have a positive impact on the whole of the London property market.”

BULLISH

Jason Rishover, CEO at Heronslea Group

“Chancellor Philip Hammond delivered a bullish first Spring Statement today. Economic growth is up and higher than originally predicted, with an improvement in the global economy helping Britain. GDP for 2017 came in at 1.7%, up from the 1.5% predicted. Good news as it shows that Brexit isn’t having too much of an impact so far.”

“As expected there were no major tax or spending rises, and again stamp duty was not addressed – the thorn in the housing market’s side, which needs a complete overhaul. There remains the huge tax burden on properties upwards of £900k. The higher stamp duty evidently hasn’t worked so far – it’s just served to freeze the market from the top downwards.”

“So a mixed bag as we move into the prime spring selling market, with no significant changes from the government. The economy is looking better – but again no changes to stamp duty for the higher end of the market, which ultimately is what we were all hoping for.”

MODEST, IF NOT LACKLUSTRE

Paresh Raja, CEO of MFS

“Today’s modest, if not lacklustre, speech offered few meaningful solutions to the long-term challenges facing the property market – albeit this was expected after Philip Hammond’s warned the nation to expect no frills from his speech. While the announcement of higher growth in the economy is welcomed, the decision to water down the Spring Statement so much is not. After all, underlying problems such as housing supply won’t wait until the Budget in the Autumn. Yes the Chancellor reiterated that £44 billion was available to help hit new-build 5 targets, but following Theresa May’s housing speech last week, today’s announcement could have taken further steps towards developing a successful plan for helping more people get on or move up the property ladder. Instead this job has been left to the housing secretary, who will purportedly be making further announcements in the coming days.”

THE ECONOMIC PICTURE HAS CERTAINLY STARTED TO BRIGHTEN

Matthew Siddell, CEO of Quorum Property Club

“Chancellor Philip Hammond delivered an upbeat Spring Statement today with an emphasis on building an economy for everyone, and new figures reflected this with growth coming in higher than predicted for 2017 at 1.7%. Good news, in the short term, however the challenges Britain faces are likely to be long-lasting.”

“For housing in London Hammond announced an additional £1.7bn to deliver 26,000 affordable homes including homes for social rent in London by 2022. More good news, however, what is not clear yet are the methods that will be put in place to ensure this is not another housing pledge which is not met.”

“So while the temperature is due to fall again this weekend, the economic picture has certainly started to brighten, and we should expect a sunnier outlook from now on.”

EXTRA FUNDING FOR AFFORDABLE HOUSING IN LONDON IS WELCOME

Angela Walsh, Sales & Marketing Director at Far East Consortium

“We welcome the plans to invest £1.67 billion to start building a further 26,000 affordable homes in London by the end of 2022, enabling more people to own their own home. Both the Stamp Duty reform and the fact the Government is working with 44 local authorities with their bids into the £4.1 billion Housing Infrastructure Fund to help build the homes that the country needs is very positive news.”

THE CHANCELLOR NEEDS TO PUT MORE EMPHASIS ON THE HOUSING CRISIS

Iain McKenzie, CEO of The Guild of Property Professionals

“Investment in housing infrastructure and collaboration with local housing authorities is undeniably a positive thing. Chancellor of the Exchequer, Phillip Hammond, nevertheless needs to put more emphasis on the housing crisis. The creation of a few hundred thousand homes in London and the West Midlands will not solve the issue for the 5,000,000 people who privately rent in the UK and are still unable to get onto the housing ladder. The changes to Stamp Duty have helped 60,000 first-time buyers, but this is not enough.”

“Guild Members have expressed their concerns to me about Stamp Duty rates stagnating the second homes market/private landlord market, lowering the amount of private rental stock and creating increased competition for tenants.”

“To lessen the risk of tenants paying higher rents, the government should review the policies that support corporate landlords at the expense of good conscientious private landlords. I am happy to discuss this in person with any government or home office official.”