Autumn Budget 2017
The new Autumn Budget will be released by the government on the 22nd of November 2017. With property likely to be a hot topic, here are five things we’d like to see addressed.
More support for landlords and investors
We would like to see some positive news for landlords and investors as previous fiscal periods have had a negative impact on the market in general. Investors and landlords have been affected by changes in Stamp Duty and Mortgage Tax relief in previous budgets and as such we are seeing a number of homes come onto the market as landlords and investors move away from the property industry. This, in turn, worsens the shortage of good quality, affordable rental properties.
If the government doesn’t address this in the Autumn Budget then the appetite to invest in London property is going to continue to dwindle. This will result in fewer decent properties available to tenants which in turn will mean rents continue to increase. The PRS/Build to Rent sector won’t be able to solve these issues in the short or medium term and with inflation on the rise rents here too will rise.
Scrapping Stamp Duty
Stamp Duty has been a ‘go to’ for previous governments to give the property market a shot in the arm, with numerous changes made almost every year for the last decade. This year we would like to see the government scrap the 3% Stamp Duty surcharge. Since its implementation, this charge (alongside the reduction of rental income tax relief) has practically ground the Buy-to-Let market to a halt.
It’s common knowledge that there is a shortage of housing in London. Statistics from the Office for National Statistics (ONS) show the number of people living in the city is on course to grow to almost 10 million by 2024. What we need are more homes to be built within the capital; the regeneration of brownfield areas are already making improvements to these locations and we think it is better to focus on these brownfield sites rather than the green belt.
Many of those who purchased their home using the Help-to-Buy scheme will shortly be coming to the end of their five year fixed rates. At this point they’ll be required to pay interest on those loans as well as remortgage, with payments potentially higher than previously. The question is are these buyers prepared for the increase in the cost of their repayments and what will the government do if not? Help-to-Buy has helped people buy property in the short term but it is not a permanent solution to the housing problem.
Regulation of agents
To improve the conditions within the rental sector there needs to be proper regulation of the industry. Letting agents can handle thousands of pounds of customer money and collect personal data without an organisation to monitor these transactions, or to ensure the data has been collected and stored correctly. Anyone can set up as an estate agent and mandatory regulation would ensure that people working within the industry follow a code of conduct, and that money and data is handled correctly with anyone not doing so being held accountable.
It’s not all doom and gloom in the property industry. There is still a market out there for property that is priced correctly, and we will be eagerly awaiting the Autumn Budget to see what the Government has in store for us this year.