Philip Hammond’s first Autumn Budget, delivered today has not gone far enough to support Britain’s property sector. That is the view of Martin Bikhit, Managing Director of Kay & Co.
We welcome the changes to stamp duty for first time buyers, which has been abolished for those purchasing a new home priced up to £300,000 and the first £300,000 for properties priced up to £500,000 in London. However, this is assuming that they can find something in this price bracket in London, where prices average £481,556 and cheaper stock is not plentiful as second steppers being unable to move further up the ladder, due to the punitive stamp duty rates which currently exist. Stamp duty needs to be reformed across all price brackets to make a big difference.
The Chancellor’s announcements on planning reform and to deliver 300,000 new homes a year are also welcome. Too many new housing projects get mired in bureaucratic red tape and, by giving local authorities more latitude, Mr Hammond has started to get on top of the problem. Hopefully, more streamlined planning procedures will enable more new homes to be built faster.
His promised inquiry into the hoarding of land by some developers is also welcome, as are his promises to guarantee loans by banks to smaller house-builders and establish a skills fund for bricklayers and electricians, so that there is a workforce in place to match the scale of the challenge. He was also right to earmark money for urban regeneration schemes and for the Housing Infrastructure Fund. But these are all relatively minor measures. By themselves, they will do little to address the housing shortfall.
With property prices continuing to rise, getting on the housing ladder is not getting any easier, particularly after the recent interest rate rise. So this financial help for millennials will be warmly welcomed by Generation Rent. The same applies to the £10 billion of extra funding for Help to Buy mortgages which the Chancellor announced earlier in the year.
Philip Hammond has so much else on his plate that it was never realistic to expect to him to introduce the kind of root-and-branch reforms that might have galvanised the housing market. But compared with his predecessor’s hikes in stamp duty, now widely regarded as an own goal, the measures he has announced should lead to marginal improvements for some home-owners and would-be home-owners. For that, he deserves two cheers.
• Martin Bikhit, Managing Director of Kay & Co has more than 20 years’ experience in the prime and super-prime property sectors. Contact Kay & Co estate agents for details of properties for sale or to rent in Marylebone, Bayswater, Paddington, Notting Hill, Mayfair, Fitzrovia, Regents Park and The West End (020 7262 2030; Kay & Co).