2016 has been an eventful year for UK property investors. Few predicted the UK vote to leave the European Union and even fewer saw a Trump Presidency. So what did today’s autumn statement mean for investors? This year they have already had a 3% stamp duty surcharge introduced on second homes and investment properties, which together with the impending changes to relief on mortgage interest for existing landlords, mean it would seem uncertainty is the only real certainty.
Todays’ Autumn Statement has been the first significant government announcement since the US election and overall has been relatively benign for UK property investors.
Whilst there had been speculation of a relaxation of the stamp duty surcharge imposed on second homeowners and buy-to-let investors this has not materialized. We were not anticipating any significant alteration to SDLT as we believe that if the May government does change it view on the recent stamp duty amendments, it will keep its powder dry and make changes after Article 50 when the government will be looking for good news stories and policies to help stimulate the building industry.
Autumn Statement – the housing headlines
In today’s Autumn Statement the Chancellor Phillip Hammond made a number of announcements which will have an impact on our market, namely:
- A government commitment to provide £1.4 b aimed at delivering an additional 40,000 new homes in England. This is a welcome announcement and likely to have a positive impact on the market. However, the government has traditionally found it difficult to physically procure new build development, so whilst this is welcome news we believe there are some real practical challenges to actually deliver this physical housing.
- Ban on upfront estate agents fees imposed by lettings agents, in our view we believe this is unlikely to have any significant impact on demand for buy-to-let property as ultimately landlords will look to pass these increased costs onto tenants and will put further pressure on rental levels.
- £2.3 b Housing Infrastructure Fund to help deliver infrastructure for up to 100,000 new homes in areas of high demand for new housing.
- An additional £3.15 b for 90,000 new homes in London.
- The launch of a new housing white paper to address more housing issues.
Whilst we perhaps didn’t get the Christmas wish some had hoped for in the form of a reduction of stamp duty, overall perhaps in times of such uncertainty we should be thankful for some positive steps to take pressure off affordable homes and increase access to new land available for development.
Interested to see what happened 5 years later in the 2021 Budget? Read more here.