Autumn Budget Review

The Autumn budget announcement yesterday was described as heralding a ‘new age of optimism’ and will make the economy stronger after the turbulence of the past 18 months. Among the many points and strategies laid out by Chancellor Rushi Sunak, there were some important points that will affect the UK’s housing market. With more governmental investment in new builds and business rates relief, Abode2 talks to leading industry professionals to get their reactions to the announcement

As part of the Autumn’s budget one of the biggest boosts to the housing market was the Government’s commitment to over £2 billion of funding to build on brownfield sites and further investment to modernise the planning process. Investor, Bruce Burkitt, Founder of Property Experts commented: “As an independent developer & investor we are playing our part in trying to deliver the much needed quality homes that are required to support the ever increasing demand in the market, so the Government’s commitment to over £2 billion of funding to build on brownfield sites is greatly welcomed. We also welcome the additional investment into digitising the planning system, which we hope will work to streamline and speed up the process, as currently we find that in its current guise schemes are held up unnecessarily that is delaying the development of tens of thousands of new homes every year.”  

Adding to Bruces’ praises of one the most positive aspects of yesterday’s Budget announcement, the multi-million-pound funding committed to digitising the planning system, Developer, Josh Chadd, Founder of Tailored Living Solutions, told us: “Like many others, we have found the current process slow down significantly since the first lockdown, with many planning departments playing catch up. A fully online system should negate any future hold ups and allow prospective developments to move through faster, which would allow us to deliver more developments that will in turn aid the current housing shortage. It is also positive to see the Government’s commitment to fund the building of new homes on derelict and unused sites, which is our key area of operation due to our focus on sourcing and developing key brownfield sites, transforming them into well-designed residential and mixed-use schemes.”

In a contrasting viewpoint, Buying Agent, Matt Turner, Founder of Astute Property Search, believes that yesterday’s announcements will have little or no impact. Explaining that: “I don’t believe that the measures announced in yesterday’s budget will have much of an impact on the property market. The additional budget for new homes is welcomed and will increase the current supply of new homes, but the new-build market is already fairly active. The SLDT holiday from last year’s budget had a notable effect on market activity, so a cut or review to the current rates would likely have buoyed many buyers, but in its absence I think it will very much be business as usual. In recent weeks we have seen a significant upturn in international buyer enquiries, so it is welcomed that there are no additional taxes on overseas buyers that when introduced previously have proved a deterrent to some. Finally, my advice to homeowners and investors is to secure long term fixed rates on their mortgages, as it is likely rates are going to rise soon with such high rates of inflation. A widely expected initial rate increase of 0.25% could put some potential buyers off I don’t expect to see a major impact on the market until the second or third hike.”

The budget had a strong focus on development and investment, however as Estate Agent – Paul Cosgrove, Director at Finlay Brewer, believes the chancellor could have done more for other aspects of the housing sector. Pointing out that: “Yesterday’s Budget has understandably more of a focus on the development sector and tackling the current supply shortage in the new homes market. From an agent’s perspective a review of SDLT rates would have been welcomed, especially following the positive impact on activity we saw during the Stamp Duty holiday. We believe that a review or cut to SDLT on second homes would have buoyed current and potential landlords and provided a much welcome boost to the flats market, which is yet to fully recover from the impacts of the pandemic. We have seen a rise in enquiries from overseas buyers, so no additional property taxes on them should see this trend continue, especially with travel restrictions easing significantly.”

Across the board, this budget has been controversial, with some believing the chancellor has created a perfectly balanced plan to help the British economy bounce back stronger and some believing he has missed opportunities to facilitate it growth. Whichever opinion you hold, there is no denying this budget will have a deep, long lasting effect on the housing market.