Autumn Statement means mixed blessings for housing market says expert
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New government plans for the housing market have met with a mixed response.
In his Autumn Statement, Chancellor Philip Hammond promised £1.4 billion to provide 40,000 new affordable homes plus a further £1.7 billion to speed up the construction of homes on public sector land.
In addition, he said the government would invest £2.3 billion in a housing infrastructure fund to support the construction of 100,000 new homes in areas of high demand.
Ian Denton, a partner at the Woburn office of Jackson-Stops & Staff, said: “The announcement was good news for the new homes sector, with the government showing that they are now prioritising housing for those who need it most, with huge funding boosts given to support the building of more new homes.”
However, it’s not all happy news, according to Ian, who is concerned that the abolition of lettings fees might be great for renters - but could mean any savings may be passed back on to the tenant through rent hikes as landlords seek to cover costs.
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He also fears it will reduce rental opportunities and give less choice to those who can only afford to rent, at a time when renting is becoming increasingly necessary.
Ian went on: “This legislation is short sighted and is yet a further challenge to landlords who have faced a barrage of increased costs over recent months, including the additional three per cent levied when they purchase a rental property and the abolishment of mortgage interest rate relief, which is set to commence in April.
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“Although the ban on lettings fees still requires a government consultation before it is implemented, its impact on the UK housing market could be far reaching. Affordability issues surrounding purchasing homes means for many, the only option is to rent.
“We’ve seen a consistent reduction in the number of landlords buying investment properties since April, with fewer rental properties coming on to the market to serve the growing rental population.
“A better solution would have been to create a more competitive fee environment and ensuring that landlords are not further discouraged from the market.”
He criticised the statement, which “didn’t go far enough and was disappointing” noting that despite industry-wide concerns, there was no reform to stamp duty.
Ian added: “A cut in current prohibitive stamp duty levels would get the market moving and give welcome relief to first-time buyers who are having to grapple with a multitude of costs including saving for a deposit.”