How does the latest Autumn Statement impact the property market?
This week saw the chancellor Philip Hammond deliver his first Autumn Statement since moving into his new role in government, and there was news in a number of key areas, including property, although perhaps not quite what was hoped for.
Industry experts had appealed to the chancellor to look more at the rental sector and its benefits to the housing market in general, as well as making a plea for changes to be made in the mortgage tax relief and Stamp Duty levy rules to better attract people into investing in a market that is becoming more and more popular with tenants all the time.
But what did he announce for property, and what impact will it have moving forward '
Letting agent fees
In what was without doubt the biggest change in the announcement, the government hit the buy-to-let market with yet another rule that will affect income levels and returns when it said that it was going to stop letting agents from charging tenants upfront fees as soon as possible.
Mr Hammond said that the move would save as many as 4.3 million tenants across the UK an average of more than £300 each. However, the property industry has been quick to point out that this could just mean bad news for tenants, with a possibility that rents will actually rise as a result as agents and landlords pass lost revenue down to their tenants.
Richard Lambert of the National Landlords Association said the announcement shows that the chancellor is still out of touch with the rental market, as although he has affordability in mind, he still does not fully understand just how the sector works.
Aside from agents' fees, the other big news for property is that the government is looking, once again, to step up its bid to build enough homes to meet demand nationwide. This is on top of the target of a million homes by 2020 that it already set itself last year.
The chancellor said that the government will be spending £1.4 billion on improving the levels of stock in affordable housing, which he said will see as many as 400,000 new homes coming onto the market within the space of just 12 months; a very bold prediction indeed! However, critics have pointed out once again that the government is still focussing on simply increasing the number of homeowners, rather than looking at market trends and the increase in the demand for renting homes nationwide.
In the longer term, the government also wants to take a look at in-demand areas across the UK and provide a greater number of homes therein. Mr Hammond announced a change to plans for infrastructure that will see these places targeted more often with funding, in a bid to add more than 100,000 much needed properties to areas where they are needed most. This plan should see the government investing yet more money into property, with more than £2 billion promised.