That wasn’t supposed to be an assessment on the content of his speech as it related to the housing and property market, but it might well have been.
Which is not to say that there were not references and measures aimed at the housing market sector, but one wonders how they might well impact the (very serious) issues we are confronting, particularly in terms of housing supply, but also in terms of providing greater access for first-time buyers to secure affordable homes.
A domino effect
To be fair, some of the measures announced might well have an indirect, and potentially positive, impact for first-time buyers but they are certainly not explicit, big-ticket in their nature, such as a commitment to build more homes, or the 99 per cent loan to value (LTV) mortgage scheme that was mentioned in dispatches and rejected.
However, you might well argue that abolishing the furnished holiday letting regime means these properties move back into being used for long-term tenancies, which increases supply of private rented sector (PRS) homes in these areas, which gives more options for renters, keeps rents down, and gives those within these properties a better chance to save for a first home.
You might well argue that abolishing multiple dwellings stamp duty relief makes property investors think again about buying a number of homes at one time, which could provide further supply to other potential purchasers, such as first-time buyers.
And you might well argue – indeed the government does this itself – that dropping the higher rate of capital gains tax (CGT) from 28 per cent to 24 per cent on selling residential property will, and I quote, “encourage landlords and second homeowners to sell their properties, making more available for a variety of buyers including those looking to get on the housing ladder for the first time…”
It may well do this, but not in the numbers that the government is likely to want, plus of course this ‘Peter versus Paul/buy-to-let (BTL) landlord versus first-time buyer’ argument has been played out for many years.
We all know that taking supply out of the PRS, particularly at a time of great tenant demand, doesn’t necessarily work well for tenants. Far from it – as we’ve seen, with rents rising rapidly over the past few years.
Going further with stamp duty
The Treasury says it anticipates an extra £600m in a year to be generated by these three measures. One has to wonder why, if the government has accepted the argument that lowering CGT on residential property sales actually increases transactions and revenue, then it doesn’t accept the same argument when it comes to stamp duty?
It’s not as if it doesn’t have recent precedent to back up this argument, given how often it has cut stamp duty or provided a holiday and seen activity – and tax revenues – rise as a result.
But, apart from abolishing multiple dwellings relief, there was no mention of stamp duty in a wider context, certainly nothing about cuts for downsizers, or even as some were led to believe, abolishing it all together.
It leaves first-timers relying on some tinkering around the margin, which may or may not convince landlords or second-home owners to part company with their properties, which may or may not be the type of homes first-timers actually want, with nothing to suggest they do, or that they can afford these homes, or they can save for the deposits, or they might also access larger numbers of new affordable homes, particularly new build.
I could go on.
A lacklustre announcement for housing
Overall, even though we were not anticipating much from this Budget, it is always disappointing not to see a concerted effort to look and provide solutions to major problems, particularly in terms of housing supply, which is where we clearly have an ongoing and fundamental problem that requires real action.
Incentivising those with multiple properties to sell can’t really be the answer to this, can it?
On that note, consider the dial barely moved at all. It will be the industry that has to produce the solutions on finance and affordability, and support for potential first-timers with schemes like Deposit Unlock, and we’re probably going to have to wait for a new Parliament before we see any movement on supply.
That message was loud and clear, if not actually stated, in a Budget that is unlikely to live long in the memory, particularly if you’d like to own your own home.
