Philip Hammond recently delivered the Autumn Statement as Chancellor and from new plans for housebuilding to bans on letting fees, there’s plenty to take note of from a property perspective. So we’re here to fill you in on some of the biggest updates and changes for landlords, tenants and the property market in general.
Funding Set Aside For New Affordable Homes
Possibly the biggest takeaway from the Autumn statement was the amount funding being made available for the development of 40,000 affordable homes, £1,4bn in funding to be exact. It has become incredibly clear for many over recent years that measures need to be put in place to help a new generation of first time buyers and while there currently isn’t a lot of detail on how this funding will used, it’s still recognised by most as a step in the right direction.
Managing Director of the National Association of Estate Agents, Mark Hayward, spoke on the announcement stating “The measures announced to boost house-building go some way to making the housing market work for everyone, but quite frankly do not go far enough," Hayward went on to say that “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.”
In addition to this, the government has also announced a massive £3.15bn to be put aside to build 90,000 new homes in London over the course of the next 4 years, with the capital being viewed as a high priority as its population continues to grow. While it may be some time before we feel the benefit of these changes, it’s a welcome boost which will hopefully bring more balance to the property market. Robert Nichols, Managing Director of Portico, stated that “With London’s population bursting at the seams and continuing to grow, it’s vital that this promise is delivered quickly - if not, growth will continue to outstrip supply and the housing crisis will worsen.”
Ban On Letting Agent Fees “as soon as possible”
In a move that has been protested by many, and arguably the biggest headline from Autumn statement, the government announced a ban on lettings fees across England and Wales.
Some renters may consider this good news, as they currently pay approximately £220 of fees on average, however, many believe the fees will simply be passed on to others. This is back by Richard Lambert of the National Landlords Association who believes that “The announcement shows that while the Chancellor has affordability in mind, he has a complete lack of understanding about how the rental sector works, and will simply be moving costs around rather than reducing them.”
It is also worth remembering that the same rules were put into place in Scotland in 2012, with seemingly very little negative impact on the property market.
Buy-to-Let Tax Relief And Stamp Duty
Over the last year landlords have had to deal with plenty of changes from the increase in stamp duty in April which was followed up by the news of the loss of buy-to-let tax relief in April 2017. While this could be viewed as a positive for first time buyers by reducing competition, there is a growing demand from a demographic of ‘forever renters’ that also needs to be met and the government seems to be standing firm on its current buy-to-let agenda.
Robert Nichols, Managing Director of Portico commented on the changes stating that it “could mean that investors are less likely to grow their portfolios because of the associated higher costs, which would free up stock for first time buyers, but it could also mean a reduction in rental stock which could fuel a surge in rental values. There is still a lot of potential in buy-to-let, but landlords will now have to be creative with where they invest and how they spend their money.”
