Spring is here, and that means another fiscal statement from the Chancellor. The budget announcement was the second from Chancellor Phillip Hammond, but what did it mean for those invested in the housing market? Let’s explore the key points:
The Housing White Paper
There was very little comment from Chancellor Philip Hammond on housing in the Budget announcement. One of the reasons was due to the publication of the Government White Paper on Housing just last month. It promised to “reform the housing market and boost the supply of new homes to England”. The initiatives are similar, if not the same, to what is available already: the Lifetime ISA, allowing you a year bonus towards your first house (phasing out the Help to Buy ISA), but one new initiative did crop up for first time buyers – discount starter homes. First Time Buyers with an income of less than £80,000 can buy a new-build home with a 20 per cent discount on the price.
Millennials looking for answers, growth to slow
Born between 1981 and 2000, Millennials are either finishing education or in the early days of their respective careers. They will be looking to the government to be building more housing, as far fewer are becoming homeowners than their parents at the same age. The affordability of housing is a huge issue for those looking to get their first home, and they were looking for the new Conservative government to shed light on how affordability will be tackled. The result was disappointing – cuts for stamp duty land tax didn’t appear, but house price growth is due to drop to 4% inflation in 2018, thanks to a squeeze on household incomes. Still, affordable homes remain at a 24-year low of availability.
Confidence Should Grow
Despite the lack of affordable homes, the Governments new initiatives should throw confidence back into the housing market. Firstly, Small firms will be offered loans to help them build 25,000 new homes by 2020. The Government is hoping they will use modern building methods to ensure rapid construction. The types of buildings will also change, with more high-rise and high-density buildings built in areas with viable transport links. The only sticking point? Whether lenders will offer reasonable mortgages on homes built in ‘untraditional’ ways.
Downsizers pinched by SDLT
Neither the Budget or White Paper mentioned anything about downsizing for older home owners – but support could be available in that builders will be encourage to construct homes suitable for older people. The fact that stamp duty won’t be cut for either downsizers or first time buyers will mean stagnation while neither group can afford to move.
Letting Agent Fees Banned, Longer Tenancies Introduced
The Government announced in the Budget that it would ban letting agent fees to tenants, exposing that renters face many upfront costs when renting. Alongside this, the Government’s White Paper stated tenancies should be more ‘family friendly’ – meaning longer-term, aiming to give landlords some stability in the form of guaranteed rental income.
Whatever happens with the housing market, iSell are always happy to help. Our team of experts are always on hand to help make the process of buying and moving house as easy as possible. Contact us today to hear how we can help you.