Chancellor Philip Hammond has been delivering his first Autumn Statement today (November 23rd) in the House of Commons since taking the reins from George Osborne earlier this year. The property market has once again been putting the pressure on the chancellor in the build up to his speech, but has he paid attention to the sector’s wishlist?
Among the calls from experts in the property sector were for the government to make it easier for the Build to Rent sector to help it meet house building targets, the removal of taxes that create barriers for rental property development and a change to Stamp Duty charges to pass the cost up the ladder and remove the burden of the taxation from first-time buyers.
And while the chancellor did not quite tick all the boxes, housing did feature quite heavily in some of the announcements made.
Here, we take a look at the big changes in property and what they could mean for the market moving forward.
Letting agent fees
In what was probably the most high-profile change announced by Mr Hammond, it was revealed that letting agents will not be able to charge tenants upfront fees from an implementation date “as soon as possible”. This will mean, Mr Hammond said, as many as 4.3 million households being protected from agents fees before they rent a home which average out at £337.
However, while this is a move that will no doubt be welcomed by tenants across the nation, warnings are already starting to come out of the industry that it could mean increased rental prices from letting agents and landlords keen to pass the shortfall they face in income down to their tenants.
Richard Lambert of the National Landlords Association said the announcement shows that while the chancellor has affordability in mind, he has a complete lack of understanding about how the rental sector works, and will simply be moving costs around rather than reducing them.
One of the biggest pain points of the government’s focus on housing in recent years has been making sure that affordable housing is both plentiful and indeed affordable. And the latest Statement appears to be following this theme, with Mr Hammond once again looking to get more first timers onto the ladder through increasing the cheaper stock available to them.
He announced today that the government will be spending £1.4 billion on improving the levels of available affordable homes, with a target of having as many as 40,000 on the market within the next year. While this is a commitment to building that we have perhaps not seen in the past, the fact that the government has seemingly ignored recent criticism of its narrow approach to demographics with regards new homes, as well as continuing to focus on purchasing in a market rapidly moving towards rentals will no doubt mean it comes in for some heavy criticism again.
New building infrastructure
And finally, in a move that could see the Build to Rent market have some leverage for improving its own market position, Mr Hammond announced a need for building more homes through a new infrastructure that would put its focus squarely on the most in-demand areas.
Places where university students and young professionals in particular are moving are among the highest demand areas nationwide, and the need for homes there could mean that the rental sector at long last, has the ability to show itself as a potential solution to the government’s housing problem.
The chancellor said that the government wants to really get a grip on these in-demand housing areas, with a plan to build more than 100,000 new homes, and a budget for doing so that will see Westminster spending some £2.3 billion moving forward.