Spring Budget 2017 wish list for the housing market
It’s the last spring Budget. What does Philip Hammond, Chancellor of the Exchequer, have planned for homeowners? How will first-time buyers and landlords be affected? Guild Members share their wish lists ahead of the Budget on March 8th.
First-time buyers
“More money needs to be invested into helping first-time buyers,” said Ian Southall, Director of Chess Moves of Tewkesbury. “Incentivising parents or grandparents would be a good angle to explore.”
Stamp duty
“The most important thing the Government should do is look at Stamp Duty on higher priced properties,” said James Gibbs of Gibbs Gillespie.
“I have heard that stamp revenue is down at present, caused by the stamp duty increases, especially to those homes valued over £1.5 million and the extra 3% on top for second homes. Generally speaking, few people are sympathetic to those affected by this situation. However, I think the extreme levels of tax should be lowered.”
“Taking a proper look at Stamp Duty would have a positive effect,” said Ian Southall, Director of Chess Moves of Tewkesbury.
“No one wants to pay Stamp Duty, and every homebuyer would love to see it scrapped, but it is very unlikely to happen,” explains Simon Miller from Holroyd Miller. “I doubt there will be any amendments made to the Stamp Duty changes already made during 2016. However, if there has been significant pressure on the government to re-think their second home Stamp Duty charge, there may possibly be some respite for the investors and developers who were affected. Locally, my view is that Stamp Duty currently works, it is fair, and much improved from the old regime.”
"I would like to see a huge simplification of the Stamp Duty Land Tax because it would help the fluidity of the market," said Philip Jackson, Director of Maguire Jackson. "It would allow more transactions to take place and would encourage individuals into the market who might wish to move again within a short period of two to five years. At the moment, the high transaction costs of purchasing and selling mean that it may be cheaper for many to rent.
"The other feature I would like to change is an easing of the burden now placed on second home owners, particularly those who use the property's income as part of their pensions."
New homes
“There may be an announcement concerning new-build homes, certainly in areas of the country where the population demands it,” said Simon Miller from Holroyd Miller. “In Wakefield, we have 4,500 new homes under construction within a two-mile radius of the city, and with the Help to Buy Equity Loan Scheme, and Help to Buy ISA still supported and widely used, I’d be astounded if changes were made to slow this down.”
Industry regulation
“To find possible solutions to the housing crisis, we must look internally to the professional practices of the industry and to the rental market,” suggests David Kutas from Victorstone in Camden. “In the UK, there is currently no formal licensing or government sponsored control over the thousands of agents currently operating. This is in stark contrast to many other countries, most notably the USA where all agents must pass multiple examinations in different areas of the industry before they are permitted to sit in an office and market a property for sale.
“Punishable actions include practices which are considered everyday procedure in Britain, such as the over-valuation of property during market appraisals, as the valuing agent is legally liable to the value given and marketing of properties which have sold or have been withdrawn from market. The end result of this control has given the USA an extremely desirable industry with considerably less competition, which is carefully regulated in their practices, formally qualified agents come as a guarantee, sales fees are higher and the entire market is far more stable than our own.
“Entry requirements in the UK do not exist; most job adverts for estate agency merely ask for GCSE level qualifications and no formal training. Introducing formal compulsory licencing to the industry would industry service standards, make buying a home easier, and prevent over-valued properties being brought to market and acting as comparable data for future valuations.”
Rental fees
In the Autumn Statement 2016, it was announced that lettings fees will soon be banned in England and Wales. Will this be discussed again in the Budget?
“The ban intends to lower the cost of renting to the millennial generation, who are increasing unable to purchase their own home and forced to rent,” said David Kutas from Victorstone. “However, it was inherently flawed because the Housing White Paper approached the industry from the perspective of the tenant. Removing the fees will lower the initial move-in costs, but it will do nothing to slow the ever-increasing cost of property and the diminishing rental yields for landlords.”
• Watch the Budget live on the BBC from 12.30pm on Wednesday 8th March.
• Click here to find your local Guild agent.
