Budget expectations and wishes
Mortgage Introducer asked a number of industry figures their thoughts on the upcoming Budget set on 11 March 2020. Here’s what they had to say…
Jeremy Leaf, north London estate agent said that he believes the most important message for the Chancellor as far as the housing market is concerned is “do nothing to compromise the already relatively low-level of transactions and as much as you can to increase them, particularly for first-time buyers.”
Leaf also believes that Stamp Duty has become a deterrent, especially at the higher end of the market, which in turn affects the lower end of the market.
He added: “Whatever you do, don’t announce a consultation as this will only freeze up activity for its duration and lead to even more indecision until the outcome is known.”
Leaf explains that more transactions are good for the property market as well as the economy in terms of jobs and social mobility.
Looking to housing supply, Leaf believes that building in high demand areas, aimed specifically at the social and affordable end, is a must.
Leaf added: “We don’t need a mansion tax or similar either. A council tax revaluation including more appropriate higher bands and levelling up some of the anomalies in the north of the country would be more welcome.
“Business rates are crying out for attention as we hear time and again of those on the high street suffering and considering reducing, not increasing, business activity.”
Nigel Purves, chief operating officer of Wayhome said that despite Coronavirus and Brexit trade negotiations being of immediate concern to the economy, he expects the Chancellor to meet the Conservative’s manifesto pledge to balance the budget by 2024.
He added: “With rumours suggesting Rishi Sunak has been rewriting his set piece, it’s important that first-time buyers aren’t forgotten when it comes to the government’s spending plans.
“This is particularly important following the closure of the Help to Buy ISA – which is yet to be replaced in any meaningful way.”
Purves believes that supporting aspiring homeowners “has never been more important”.
He added that it is in the government’s interest “to make a meaningful difference. Innovation will be central to this and needs to be adopted to provide credible, affordable routes to homeownership.”
Asaf Navot, chief executive of Home Made stated that “despite the government’s claim of its commitment to fixing the UK’s housing crisis, it is unlikely that this budget will offer much in the way of immediate relief from taxation for landlords.”
Navot believes that a potential lift in the stamp duty threshold would reduce some of the taxation landlords face. However, he said that, “without a review of both the 3% surcharge placed on investment properties, and the loss of buy-to-let mortgage interest relief, this measure will do little to increase the rental supply or benefits to landlords.”
Navot highlights that due to more people renting and for longer, the government should focus on easing the housing supply by reducing taxation to encourage more landlords into the market.
He also said that the government should incentivise developers to build more homes to meet rising demand.
In conclusion, Navot said: “While it is politically logical to pursue government-led initiatives to boost levels of home ownership, more needs to be done to ensure we are encouraging development of quality housing, supporting good landlords, and enforcing compliance, to provide properties that suit the variety of ways people choose to live in the 21st century.”