The Autumn statement, the first from Philip Hammond, offers little to the housing market or as he calls it “the housing challenge.”
Whilst many of us in the industry hoped for a change to stamp duty or buy to let tax reforms, none of this was forthcoming. Instead, we have some big numbers, £3.7 billion towards infrastructure for 100,000 homes with 40,000 affordable homes by 2020/2021. Scratching beneath the surface, it’s lacking detail and planning. Of this £3.7 billion, a ‘step change’ is predicted; however much of the money is associated with infrastructure rather than building new homes but we should not be dismissive as this is much needed in rural counties such as Norfolk. The £1.4 billion on affordable housing in England is of course beneficial. Affordability is the biggest issue facing the housing market now and in the future and this assistance to local authorities to help with affordable rent, shared ownership or rent to buy is going to help but this is merely one small step to bridging the gap which is ever increasing. The year to March 2016, just over 32,000 affordable homes were completed, a fall of 52% on previous years.
Whilst overall housing supply increased by 11% to the year of April 2016, it does demonstrate that the gap in recent years has not narrowed but widened. The government is hoping to narrow this in the short term by increasing the right to buy for housing association tenants. In many cases, this is outdated housing stock and not appropriate for the long term which again is a short term fix.
Another short term fix and potential headline grabber is a cessation of fees that could be charged to tenants via letting agents. Whilst this may mitigate initial costs and control, unscrupulous agents seeking to make a quick buck; the long term implications on the tenant will inevitably be higher rents. Most canny investors are seeking to achieve specific returns on their investments and shouldering the cost of carrying out the credit checks and so on, this will undoubtedly have an impact and inevitably lead to many landlords increasing their rents to cover these costs. This may not be an issue to short term tenants on 6 months to a year contracts but with many families renting properties for 3 to 5 years and beyond, their long term costs will far exceed their £300 - £500 that they may have initially spent. As with many of these statements, a small step in the right direction has been achieved but still much to do to heal the ongoing wounds of decades of inaction relating to the UK housing market.