Brokers react to the Chancellor's statement
Chancellor of the Exchequer Jeremy Hunt delivered his autumn Budget on November 22, which focused on supporting homebuyers with smaller deposits.
While the extension of the Mortgage Guarantee Scheme for an additional 18 months until the end of June 2025 can be seen as a positive, several brokers believe the latest Budget left a lot to be desired.
What more could the Budget have offered?
Gavin Richardson (pictured), managing director of Mortgages for Business, said the housing sector’s expectation for an Autumn Statement that would extend support to landlords has been met with disappointment, leaving the buy-to-let market entrenched in what feels like landlord limbo.
Plans to abolish Section 21 ‘no fault’ evictions in the Renters’ Reform Bill, Richardson said, are still on hold as we wait for the court system to be reformed. Currently, he added, it takes six months for landlords to regain possession of their property following a legitimate claim.
Richardson said landlords have lost confidence in the courts and are concerned about the security of their investments without Section 21 in place.
“We want the government to set an eight-week target for processing times for possession claims before abolishing Section 21; the buy-to-let community is still waiting for that,” Richardson said.
Another unmet expectation, Richardson said, was the desire for Capital Gains Tax relief for landlords selling a property to a sitting tenant or first-time buyer, with the intention to reinvest in a new property for letting.
He added that landlords also sought a review of the Stamp Duty Land Tax surcharge, a call that too went unanswered.
Similarly, he said the much-needed review of mortgage interest relief for landlords did not come to fruition.
“These unaddressed concerns contribute to the ongoing damage inflicted upon the private rented sector,” Richardson said.
The sector, which could play a crucial role in providing more homes to meet escalating demand, he said, finds itself hindered by the absence of long-term planning and collaboration.
As the unresolved issues persist, Richardson said the potential of the private rented sector to contribute significantly to the housing landscape remains stifled.
“The plea for attention to these matters echoes louder than ever, emphasising the need for strategic reforms to unleash the sector’s capacity to alleviate housing demand pressure,” he said.
Was the Budget a positive for the housing market?
Andrew Montlake, managing director at Coreco, said the recent Budget has left those in the housing and mortgages sector somewhat disheartened, as hopes for a market-boosting announcement seemingly fell flat.
“The Chancellor’s hands are tied by a shortage of funds, and tax cuts of some description were always going to take precedence,” he said.
These decreases, in the form of self-employed tax cuts and a reduction in National Insurance, while relatively insignificant in the grand scheme of things, he said, are to be welcomed.
“A slightly more noteworthy change was the alteration to Permitted Development rules; now, individuals can convert their properties into two flats, with the stipulation that the exterior remains largely unaffected,” he said.
This adjustment, Montlake said, injects a degree of interest into the overall Budget narrative, offering a potential avenue for property transformation.
However, beyond these specific measures, he said the general sentiment is one of disappointment in this ‘damp squib’ of a Budget.
While the Budget brought some minor welcome changes, Montlake said, it did not meet the expectations of those eagerly awaiting significant shifts in the housing market.
Looking ahead, Montlake said it is speculated that the Spring Statement might usher in more opportunities and initiatives related to housing.
He added that this could be the time when more comprehensive measures are introduced to address the needs and concerns of the housing and mortgage sectors, such as the supply and demand gap.
What more do you think the autumn Budget could have offered the housing industry? Let us know in the comment section below.