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Spring Budget ’17: Lloyds Bank urges Chancellor to let housing market breathe

by: Mike Jones, managing director of intermediaries and specialist brands at Lloyds Banking Group
  • 08/03/2017
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Spring Budget ’17: Lloyds Bank urges Chancellor to let housing market breathe
The market has remained resilient after a year of change, challenge and uncertainty, and as the dust settles we’ll begin to see the impact of this settling down in 2017.

A period of stability now would help us adapt to the new regulations and processes instead of risk adding further complexity. Layering change upon change makes it increasingly difficult to distinguish cause from effect. Taking a step back to consider how the market is now working – and identifying where it can work better – would also improve future policy-making. For example, the oft heard accusations about how developers manage and build out their land banks could tempt kneejerk policies that are easily avoided and potentially self-defeating.

The recent housing White Paper recognised that there’s no overnight solution to the complex challenges including assessing housing need, planning and land availability, but the support is there for opportunities that translate to measures that could create the sustainable market we need.

We created our Housing Commission and Housing Growth Partnership as steps towards addressing the shortage of homes, and we have committed to lending £10bn to first-time buyers in 2017 as part of our Helping Britain Prosper plan. Lloyds Banking Group is also actively involved in supporting SME builders through its work with the Housing Growth Fund.

But that doesn’t mean there aren’t areas where changes could be more welcome, whether they are addressed now or in the near future.

Stamp Duty is recognised as a major inhibitor of activity as it drives up the cost of moving, particularly for properties in the upper echelons of the market and has weighed heavily on the second home and BTL sectors.

The value of this contribution to the government’s coffers is clear, but the implications on real people’s lives and the housing market in general seem far less understood. A greater understanding of these mechanics could have the potential to positively influence Budget announcements. I doubt that we’ll see them today, but am hopeful that we will by the time the Chancellor stands up to present in the autumn.

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