Certainly, David Cameron wandering into Number 10 to become Foreign Secretary feels a lot like this. Plus, we have now got another Housing Secretary after Rachel Maclean was sacked – soon there will be more MPs in Parliament who’ve held this role than haven’t.
What this actually all leads to next is, however, far more important. Changing bums on seats is one thing, but positive policy and measures are actually what is required and, for our sector at least, the Autumn Statement on the 22 November seems like the perfect opportunity to announce something significant and game-changing, which increases activity and the number of transactions.
To that end, and given the history of various Conservative governments over the past 13 years or so, what would feel like a big deal for the market?
For the Tories to have any chance of winning the next General Election, perhaps the big policies lie in other areas, but in the here and now there’s certainly a need to secure some sort of economic growth, and to also somehow change the narrative in terms of how the UK has become a high-tax economy.
Think of downsizers as well as buyers
In the housing and mortgage markets, what tend to be the go-to areas of intervention and attempted stimuli? Clearly, the big lever to pull is always stamp duty – which brings in significant money to the Treasury coffers – and again there is the opportunity to deliver some real change here.
The government should be looking at both ends of the market, and in our belief, there is time for a stimulus, because by the time any transactions come through, the tax ‘hit’ is actually going to be put off to a point where the General Election will have probably already happened.
In that sense, there is the opportunity to abolish stamp duty for any first-time buyer, regardless of the price of the property they are buying. They could also increase the threshold to take more purchases out of the tax, and they should certainly introduce a policy that either gets rid of or reduces stamp duty for those people over 55 who are downsizing.
At the moment, we have far too many people living in far too many properties that are simply too big for them. These family homes are being kept in the family because of the cost of moving, of which stamp duty is a significant part. Equity release has also not helped as it has kept single, older people in homes which would normally come to market for families to buy.
Scrapping stamp duty for older homeowners’ downsizing would free up a significant number of larger three, four, five-bedroom homes and bring them to market.
Incentivise productivity
The number of homes available to buy remains a massive issue. New-build development has fallen off a cliff since the end of Help to Buy, and while this had its issues as a scheme, some sort of Help to Buy alternative is required.
It is no wonder the government scrapped its new housing targets given they had no chance of ever meeting them, and we desperately need some policies that encourage developers to build, rather than sitting on land because it’s more profitable to landbank than actually build on them.
In other areas, to help incentivise and encourage business, the government should be looking at cutting corporation tax, while it might also wish to review IHT allowances and up those to reflect the change in society over recent years, particularly in terms of house values and how much of the allowance this asset now takes up.
Overall, this has to be an Autumn Statement which delivers something big and bold. We’re all acutely aware of how purchase activity has stalled over the last 12-18 months; interest rates are moving in the right direction in terms of helping affordability, but there are some significant government costs for buying/selling, that if jettisoned could add real impetus to the market.
We need encouragement for first-timers, encouragement for downsizers, and encouragement for builders – with potentially less than a year until we elect a government, what has this administration got to lose?
