By Simon Bath, When You Move’s CEO
Housing was THE big talking point ahead of this year’s Budget, and following Wednesday’s announcement, Chancellor Philip Hammond has delivered on his previous promises to stimulate the property market and help out first time buyers.
Hammond began his speech on Wednesday 22nd November by saying that the world was on “the brink of a technological revolution” and Britain was at the forefront. With that in mind, this Budget was not all about Brexit, but instead about “building a country fit for the future”. In some instances, quite literally with a promise to kick-start the next generation of home building.
The country is on the brink of a technological revolution, and I believe that’s true of the property industry too. It’s what we’ve been working towards at When You Move, using technology to make the home buying and selling process simple and easy. Now that there’s more incentives like new homes and SDLT relief, this should get the market moving, and When You Move will be there to support home buyers and property professionals. Overall, the Budget has provided a much-needed shot of adrenaline to the property market to get it moving again.
300,000 new homes to be built a year
As part of the Budget, the Government announced that it is investing £44billion in housebuilding, which will help deliver an average of 300,000 homes a year – the biggest annual increase in housing supply since the 1970s. There’s also £1.5billion of new money for the Home Builders Fund to get SME housebuilders building again.
This should help to stimulate the market as one of the main problems is stock, or rather lack of it. With more property available, more people will be able to move house, which will in turn provide more business for estate agents, mortgage brokers and conveyancers.
I’m optimistic about the level of new homes projected as the UK certainly needs more stock, but it’s cautious optimism, as Governments tend to over promise and under deliver. Pledges to build new homes usually end up with less than a third of their commitment actually being built.
But lack of houses isn’t the only thing stalling the market
Some people are considering moving house but remain on the fence because the home buying process has become so drawn out and stressful. They think it’s too painful to go through the legalities of moving house, so we lose fluidity in the market. When You Move is changing this, but we can’t do it alone, the Government also needs to make the house moving process simple and more efficient.
The Government’s recent Call for Evidence on how to improve the home buying and selling process indicates that this is on their radar, but we will have to wait until the results next year to see how they are going to tackle the issue.
Stamp Duty exemption for first time buyers
As well as getting the market moving, the Budget was weighted in favour of first time buyers. Hammond’s “white rabbit out the hat” moment of the Budget announcement was the new ruling that Stamp Duty has been scrapped for first time buyers on homes worth up to £300,000.
This means that 80% of first time buyers won’t pay the SDLT. For those who are purchasing property worth between £300,000 and £500,000, they will still save an average of £5,000 as first time buyers will pay no Stamp Duty on the first £300,000 of a property.
Some critics have already come forward to say that making first time buyers exempt from the tax doesn’t actually address the core problem of the housing market which is “the difficulty faced by existing owners in both moving up the ladder and downsizing”. This is because the so-called second-steppers are inhibited by the higher Stamp Duty costs, which puts them off moving and so “constrains the supply of homes appropriate for first-time buyers.”
However, any steps towards making the market more fluid, no matter which end, can be seen as encouraging. Hammond is trying to help people both inside and outside of London, as obviously the London market is so inflated most first time buyers won’t be helped by an SDLT exemption for properties under £300,000 so at least they still get a discount.
On the brink of a technological revolution
Overall the Budget is promising for the property industry as the availability of new houses and the lift in Stamp Duty for first time buyers should help to stimulate the market and provide more work and cases for property professionals.
It’s great to see that the Government has recognised the need to embrace technology and build for the future. At When You Move, we’re here to help make that happen in the property industry, helping to tip it over the edge from archaic to innovative for a healthy property market.