Ryan Etchells, chief commercial officer at Together, said one of the most pressing issues the Prime Minister faced was “reviving the UK property market in a credible way”.
Etchells said: “While there are signs of slow improvement, the market remains constrained by affordability pressures and broader economic uncertainty.
“And, despite Burnham’s flagship council housebuilding plan getting the industry buzzing – our analysis warns there just isn’t enough public land to deliver a programme this size.”
The specialist lender suggested that the delivery of council homes would require support from the specialist lending sector, as SME housebuilders would need access to finance.
Etchells added: “Developers need access to funding that can keep pace with the realities of a project, whether that’s navigating planning delays, drawing down finance in stages or moving quickly when a site becomes available.”
Are your clients ready for the first Making Tax Digital reporting deadline?
Sponsored by BM Solutions
Nathan Emerson, CEO of Propertymark, said there were “main complex challenges” around the delivery of a sustainable mix of affordable housing in each region.
He said the sector had an opportunity to engage with the government on housing issues, adding: “Looking at the bigger picture, a diverse housing mix must be delivered with a regional focus and supported by robust local infrastructure. Building homes is the challenge; building well-designed, functional communities must be the goal.”
Stamp duty reform to ignite the market
Ahead of taking office, Burnham advocated replacing council tax and stamp duty with a land value tax, leading to speculation that the new Prime Minister could reform the tax structures.
Etchells said: “Burnham needs to ensure he looks at property taxation, including changes to stamp duty – which should happen given his previous support for reforming property taxes. Reform that encourages downsizing could release larger family homes into the market, increasing transaction volumes and demand for mortgages, bridging finance and short-term property funding.
“He has long advocated a land value tax to replace stamp duty and council tax. This would take years to implement to make sure its introduction is fair but would get the property market being held as it currently is by economically damaging stamp duty.”
Nick Leeming, chair of Jackson-Stops, said housing was evidently at the top of Burnham’s agenda, and while building more homes was essential, the market also needed existing homes to circulate more freely.
He pointed to the firm’s research suggesting that removing stamp duty costs could free up more than 300,000 owner-occupied homes across England within a year.
Leeming said the new government could restore confidence by reviewing the upfront costs that “continue to hold back buyers and sellers”.
He added: “If that can be achieved, we should see momentum return, more transactions progress and more people able to move when the time is right for them.”
End to rough sleeping pledge exposes need for housing
Valentin Boboc, senior economist at the Institute of Economic Affairs, said that despite Burnham’s promise to end rough sleeping by 2020 when he was Mayor of Greater Manchester, this rose four years in a row.
Boboc said the problem of rough sleeping showed “how serious Britain’s housing shortage is”, adding: “To tackle this, the Prime Minister should focus on speeding up private housebuilding across the country to make future efforts more cost-effective.”
Etchells said a “clear and tangible plan” was essential to restoring confidence among housebuilders and developers, which should include regional housing targets, a pipeline of public land, accelerated planning zones and a joined-up approach with the industry.
He also said the mortgage market needed to trust both Burnham and his Chancellor – Jonathan Healey – to deliver the changes needed.
“Constraints due to higher interest rates than the ultra-low-rate era and affordability tests continue to dampen activity. More support for borrowers – whether first-time buyers or homemovers – during the ongoing household income pressure is also important.
“While we must avoid the disaster of a mini Budget repeat, working in lockstep with the mortgage industry and regulators will reduce uncertainty,” Etchells suggested.
Real support for landlords
Encouraging landlords to remain invested in the private rented sector is “paramount”, Etchells added, saying they were key in supporting people who could not or did not want to buy a home.
“Burnham’s government needs to put an end to the almost constant barrage of tax and regulation increases, we’ve seen in recent years that make renting out property unviable for many,” he said.
Etchells’ said Together’s research showed most landlords were considering refinancing existing portfolios to fund future investment as confidence in a more professionalised sector grew.
“This has to be encouraged by the new PM, alongside the major council housebuilding scheme that has been mooted,” he added.
