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A review of the Spring Statement – what does it mean for you?

News at Kings Group | 21/03/2019

Last year’s Budget saw stamp duty relief extended to shared ownership buyers, while 2017’s Budget featured the abolishment of stamp duty for first-time buyers purchasing a home costing up to £300,000.

As we await the autumn Budget later this year, Chancellor Philip Hammond recently took to the House of Commons to deliver the Spring Statement.

Here at Kings Group, we outline the key policies that were announced in the Chancellor’s speech and discuss how they could affect property buyers and sellers as well as landlords and tenants...

Investing in housing and infrastructure

Chancellor Philip Hammond delivered the 2019 Spring Statement on March 13, announcing further progress on planning reform and discussing the success of some previous measures designed to help home movers.

He reaffirmed the government’s commitment to housing delivery from the Autumn Budget 2017, when it set out new policies to raise housing supply by the end of this Parliament to reach an average of 300,000 a year.

To deliver this ambition, the Chancellor pledged to introduce additional planning guidance to support housing diversification on large sites, which would increase build out rates.

He also aims to introduce a package of reforms, including allowing a greater change of use between premises and new permitted development rights to enable upwards extension of existing buildings to create new homes.

What’s more, the government will publish a Green Paper which will set out proposals on how greater capacity and capability, performance management and procedural improvements can speed up the planning process.

But that’s not all; of the £5.5 billion Housing Infrastructure Fund, the government will use £717 million to unlock up to 37,000 homes at the Old Oak Common in London, Oxford-Cambridge Arc and Cheshire sites.

And, through the Affordable Homes Guarantee Scheme, the Chancellor promises up to £3 billion of borrowing by housing associations in England to support the delivery of around 30,000 affordable homes.

The elephant in the room…

The Spring Statement was delivered at a time when Parliament’s focus is firmly on the UK’s impending exit from the EU, with Theresa May recently losing her second ‘meaningful vote’ on the proposed withdrawal deal.

Unsurprisingly, the Chancellor spoke about the downsides of leaving the EU without a deal, highlighting the potential for ‘significant disruption in the short and medium-term and a smaller economy in the long-term, than if we leave with a deal’.

He added that, following a no-deal Brexit, the government would have to act with caution if it felt that the economy needed stimulating.

It’s clear that Brexit uncertainty has been affecting the housing market, with the rate of house price growth dipping in recent months. A no-deal Brexit could cause further short-term disruption, due to a shaky economy.

However, once the course of Brexit is finalised, it will certainly help to kickstart the market as people who have been delaying moving decisions will be invigorated to push through their moves before the summer months.

So, a final decision on Brexit – whatever that may be – will help to provide a boost to the property market after such a lengthy period of uncertainty.

Industry reaction

The Spring Statement was met with mixed viewpoints from the experts, with some appreciating the Chancellor covering housing, and others still waiting for the delivery of promises from previous Budgets.

Lord Porter, chairman of the Local Government Association, said: “With councils still facing a funding gap of more than £3 billion in 2019/20, it is disappointing that the Chancellor has missed the opportunity to provide further desperately-needed funding for our under-pressure local services this year.”

Mark Hayward, chief executive of NAEA Propertymark, responded positively to the new £3 billion Affordable Homes Guarantee Scheme. “We support anything which serves to increase the supply of housing stock and improve accessibility for first-time buyers who have been increasingly priced out of the market over the last five years,” he said.

TV property expert and co-founder of Move iQ, Phil Spencer, added: “Any boon to Britain’s chronic housing shortage is, of course, not to be sniffed at – but the Chancellor’s plans simply do not go far enough.”

“It’s time that housing experts were brought into the process of developing a strategic housebuilding plan – one that can't be with tinkered with for the purpose of gaining votes every time a General Election is on the horizon,” he said.

While the country awaits a Brexit outcome, those with an interest in the property market can find solace in the fact that the government is still focused on housing after its range of housebuilding initiatives announced.

However, there is still more to be done and once Brexit is finalised, we look forward to the autumn Budget where we hope the Chancellor will address some of the country’s wider housing and property market issues in more detail.

Despite the uncertainty around Brexit, spring remains a good time to sell or purchase a home as the UK property market traditionally becomes more active during this period. And, with the weather beginning to pick up, movers are eager to get out and about to view properties.

Here at Kings Group, we can provide guidance on selling, buying or letting a property in North London, East London, Hertfordshire and Essex. For more information, contact your local Kings Group branch today.

Additionally, to find out how much your home could be worth on the current market, you can request a free instant online valuation.