Today’s Autumn budget offered little news for the mortgage industry amid much talk of ‘levelling up’ the economy.
Plans to build on brownfield sites and remove unsafe cladding had previously been mooted, and were welcomed. And while some felt that ‘no news is good news’ in terms of property taxes, others believe not enough is being done to tackle the UK’s housing crisis.
Below are initial budget reactions from a number of industry spokespeople:
“As well as building more homes suitable for people at all stages of life, it’s important that as a nation we make the best use of the bricks and mortar that already exists. Alongside measures to build more green homes, we had hoped to see more government policy driving toward making it easier for people to downsize to a home that best suits their needs and lifestyle.
“Rampant house price inflation in recent years means more homeowners are at risk of breaking the £325,000 tax-free allowance when they pass on their estate. Inheritance tax cuts for downsizers could help by encouraging more people to make the move to a home which best suits their lifestyle and needs in later life.
The recently ended stamp duty holiday policy has spurred much activity in the housing market, but we now want to see considered long-term reform of this tax, particularly relief for those making their final property move.
“Together, these reforms could help free up much sought after, larger family properties and make the choice of moving to a more manageable home easier for many older people.”
Lifestory chief executive Mark Dickinson
“The chancellor talks of levelling up, considerable increases in budgets, admits that unemployment is still growing. Inflation is expected to peak at 4%, with debt to GDP still rising for the next few years. Not to mention the introduction of his fiscal charter, which is nothing more than a political stunt, and could see the UK economy hung by its own petard. “The Tories will not want to break the fiscal charter and be seen to renege on these commitments. We don’t need gimmicks that can and absolutely will backfire; we need pragmatic politicians that deal with the situation before them rather than grandstanding, which so far is all that has happened. “It’s not all bad news; it’s great that the public sector pay freeze will be abolished – let’s just hope that the rises are above inflation; otherwise, that too will be more smoke and mirrors, and it’s high time that the minimum wage is to rise to help the lowest paid in society.
“However, as always, it’s given with one hand and taken with another.
Rishi mentioned he’d written to the governor of the Bank of England reaffirming the commitment to keep inflation at the target of 2%, and given it’s likely to peak at 4% according to the OBR; you can bet your bottom dollar that a base rate rise is on the cards sooner rather than later.
“What does all this mean? In reality, services will continue to be squeezed, mortgage rates will likely rise, the poor will be left by the wayside, and this deleterious government will continue to ride roughshod over the country until a real opposition and credible alternative can muster the strength to stand up to these charlatans.”
Shaw Financial Services founder and mortgage expert Lewis Shaw
“This Budget could be regarded as a reprieve for the housing industry as many feared they would be clobbered one way or another, whether that was through higher capital gains tax or other measures which would have an impact on activity. When you don’t see much of anything, it is effectively the Chancellor saying he is happy with the way the market is operating at the moment and doesn’t wish to rock the boat. “Perhaps some measures aimed at first-time buyers would have been welcome. But by not introducing further controls or obligations on landlords, that has made it easier for people to save as it means rents, which are already going up, are less likely to rise further still. “We would have liked to see more help on supply, although we need to see more detail as to what he announced.Supply helps to keep prices and rents under control when it is more in balance with demand. The aim should be to keep the market moving and affordable supply, in particular, increasing.” Former Rics chair Jeremy Leaf “Cladding is a huge and deeply unfair issue, which is hitting many people hard. Making further funds available to deal with the cladding crisis is welcome and will help those people trapped in their homes with an additional 4 per cent tax on developers with profits of more than £25m. This will help those homeowners who are unable to sell or refinance due to factors completely beyond their control.
However, the government must continue to monitor the situation and do more if necessary.” MT Finance director Tomer Aboody
“Today’s Budget was full of the usual optimism and rhetoric, but light on substance for the property market. But I dare say the property sector will not mind. In reality, no news is good news, particularly as there were many rumours that a CGT hike was in the offing.
“The property market bucked the trend and thrived during the pandemic, so limited state-interference at this time makes sense, allowing the market time to reset after the stamp duty holiday. Plus, the Government needs all of the tax receipts it can get to fuel its ‘levelling-up’ agenda, so reforms to stamp duty or inheritance tax, which will have impacted property owners, were never likely.
“For many homeowners and property investors, all eyes should now turn to next week’s Bank of England meeting.
Inflation has been on the rise throughout 2021, and the BoE will be under pressure to increase interest rates to combat this trend – doing so will impact on the cost of borrowing for property buyers, so this meeting could in fact hold greater relevance than today’s speech.”
Market Financial Solutions chief executive Paresh Raja “It’s always nice to see a rabbit-pulled-from-the hat during the Budget. Unfortunately, the rabbits all escaped several days ago and have been bounding over the front pages ever since.” Altura Finance managing director Rob GillOriginal Article
