Yesterday saw the first budget announcement by Chancellor Hammond. Whilst the property market as a whole left feeling disappointed, we have put together some of the industry leaders comments and reactions to the Spring Budget for 2017.
So, who are we hearing from today? We have the reactions from the founder and chairman of Platinum Property Partners Steve Bolton. The CEO of the London-based award winning bridging lender Market Financial Solutions Paresh Raja and finally, the founder and CEO of the leading online estate agents eMoov, Russel Quirk.
Steve Bolton Commented:
Steve Bolton stared by suggesting that, “The housing market is broken – but today’s Budget was completely devoid of any policies to help homebuyers. It’s particularly disappointing that the Government failed to comment on or reform the upcoming reduction in mortgage tax relief for landlords that threatens to derail the buy-to-let sector (BTL).”
“The route to homeownership for first-time buyers must be made easier. Proposed measures to help young people acquire more skills, and therefore potentially achieve a higher income in the long-term, are positive but won’t make a difference in the short-term.” He then went on to suggest that, “Attacking landlords and putting pressure on the private rental sector will only hinder tenants’ aspirations to get onto the property ladder.” Bolton said, “After the Tenant Tax is implemented next month, many landlords will find their tax bill outweighs their profits, forcing them to either leave the market or put up rents. Both will ultimately result in higher costs for tenants, who will then struggle even more to save for a deposit. “
“The Government has positioned this tax change as levelling the playing field for first-time buyers and investors, but the fact is they generally do not buy the same types of properties. Preventing landlords from buying homes will not result in a wealth of properties becoming available for first-time buyers or mean that tenants suddenly have the required deposit to buy. Renting is also the desired option for many at certain times of their life before they decide where and whom with to settle down.”
Moving onto the BTL sector, Bolton had this to say, “There is a fundamental misunderstanding of how the BTL sector operates at the heart of this policy and it also completely contradicts the importance placed on the rental sector in the Government’s recent housing white paper.” Bolton’s final comments on the property market as a whole were, “When this tax was introduced in Ireland, rents soared until the Government was forced to repeal its policy. The same will undoubtedly happen in the UK. But while we wait for Government to realise its mistake, thousands of hardworking tenants and landlords will suffer. The Tenant Tax must be abolished before real damage is done to rental sector.”
Paresh Raja Commented:
Paresh Raja suggested that, “It’s a shame that there were no further reforms or initiatives for the property market, which was entirely overlooked. With Brexit negotiations due to start at the end of the month, Philip Hammond opted not to pursue any significant change with regard to the property industry despite the sector acting as a cornerstone to the nation’s economy. “
Raja then goes on to comment that, “The commitment to building more affordable housing is of the utmost importance. However, with figures showing that the number of first-time buyers having to pay Stamp Duty on property purchases has hit a ten-year high, the decision again to leave this tax untouched in the Chancellor’s speech will disappoint a huge number of prospective property buyers – from those trying to get on the ladder to investors looking to expand their portfolios.”
Russell Quirk Commented:
Russel Quirk starts by commenting that the Spring Budget was, “A bitterly disappointing, lacklustre Budget by Mr Hammond in terms of addressing the current UK housing crisis. It is clear he is continuing the head in the sand approach of those before him in bypassing the issue, with a few headline-grabbing business initiatives and the usual proclamations about how great the economy is currently performing.”
Quirk suggests that it’s “Ironic that a former property developer should give the subject such inadequate focus within his plans and woeful for those aspirational buyers on the ground still dreaming of getting on the ladder.”
“The issue of housing has become the final coat of gloss on recent budget announcements, mentioned in passing to tick the boxes of a “well rounded” economic plan, but equating to little more than aesthetic fluff.”
Quirk suggests that it’s, “A real shame Mr Hammond hasn’t put his mind to solving backlash around the revaluation of business rates. There is an underlying feeling of angst throughout the population surrounding this uncertainty and he would have done well to use his first Budget as a platform to quell these feelings, but has in effect, chosen to sidestep the issue.”