Radical action in the Budget to deal with our ‘broken’ housing market is unlikely while political and economic uncertainty prevails.
Clearly, increased market accessibility, which raise the number of affordable sales and lettings in particular as well as greater concentration on SUPPLY not demand, remain priorities.
But, extra housebuilding alone will not be enough to solve the supply problem as it only constitutes a small proportion of the around 1.1 million transactions which take place very year. A stagnant market for existing homes is bad news not just for housing but for the wider economy
I’m sure more could be done to encourage local authorities and housing associations to build more genuinely affordable homes for sale and to let.
Lending as well as planning remains a significant obstacle to development – especially for SME developers.
A re-appraisal of the green belt, which results in more economic use of derelict parts while protecting valuable areas where brownfield is exhausted, is long overdue.
Help to Buy
It’s all very well encouraging Help to Buy, which is actually regarded more as ‘Help to Sell’ by many in the industry, but should be complemented by more supply i.e. faster delivery of planning consents and infrastructure, especially on publicly-owned land.
Stamp duty changes
Nevertheless, on the High Street we have found stamp duty at more affordable price levels remains a significant tax on mobility and barrier to activity. Increasing the lowest stamp duty thresholds in line with inflation would help aspiring first time buyers address their biggest obstacle – raising deposits.
Making a distinction on capital gains tax between longer-term owners and speculators would also stimulate more activity, in my opinion.
Further taxes or regulation on landlords would probably only act as an inducement for them to sell or not increase portfolios. The resultant shortages will only add to upward pressure on rents and make deposit saving for first time buyers even more difficult!
I anticipate we may see increased council tax and several higher property value bands as part of a long-overdue re-valuation, which could go some way to financing some of these changes as well as benefit the whole market!
Jeremy Leaf, a former RICS residential chairman & independent North London Estate Agent