Spring Statement: Industry Response | Mortgage strategy


Today’s spring statement was a low-key affair on housing policy, but Chancellor Rishi Sunk announced a zero VAT cut for energy efficiency improvements.

Industry figures were quick to make their views known.

Keystone Property Finance managing director Elise Coole is pleased with the news but has some reservations. She says: “While this is a step in the right direction, we believe the government could – and should – do much more to help people with the immense financial burden associated with greening their homes. Their houses.

“The Chancellor says his plan will save the average person installing solar panels on the roof over £1,000. But is that really an incentive when the average cost of installing solar panels is around £4,800? »

She continues, “If the government is serious about pushing people to action, it needs to provide more direct financial support, such as expanding the boiler upgrade program so that more people can benefit from it.

And the shadow of the Green Homes Grant – abandoned just over a year ago – hovers. Coole says: “Ideally this would run parallel to the introduction of a replacement for the now defunct Green Homes Grant, which provided grants of up to £5,000 to those making energy saving improvements. If given the time and adequate funding, this program could have flourished and become a true game-changer.”

And Jeremy Leaf, North London estate agent and former residential chairman of the Rics, comments: “Although [the VAT cut] will benefit a few homeowners who can afford to install them in the first place, it’s no use unless there’s enough buy-in and consumer confidence in the product, which there isn’t currently with regard to heat pumps.

“Consumers are concerned about the maintenance and upkeep of these and there needs to be more confidence around their operation.”

Notable by its absence was any Sunak conversation about landlords. To some the topic may have seemed relevant as just today the Office for National Statistics released data showing that rents paid by private tenants have risen at their fastest pace in five years.

Gráinne Gilmore, Head of Research at Zoopla, says: “The rising cost of living, a main theme for the Chancellor today, will impact the rental market.

“Those most affected by rising energy and household bills may choose to stay in their existing rental accommodation as demand for rental properties has driven average rents for new rentals up by around 8% over the year.

“At the same time, the rising cost of mortgages could mean that more renters are delaying their first step on the housing ladder, staying longer in the rental sector.

She concludes: “All of this will increase the demand for rental accommodation, while the supply of rental accommodation is limited, underlining the importance of policies to support the provision of rental accommodation at all levels of affordability.”

Meanwhile, National Residential Landlords Association chief executive Ben Beadle says: ‘It remains disappointing that the government has not yet explained what will be required of the rental sector in terms of energy improvements. The sector urgently needs clarity.

“More broadly, as tenants, like everyone else, face a cost of living crisis, the Chancellor should have reversed his decision to freeze housing benefit rates. Without it, those dependent on the benefit will find it increasingly difficult to pay their rents. »

Leaf adds: ‘We are glad the Chancellor has not targeted landlords more with more tax and red tape. What happens in the sales market is mirrored in rentals, with a shortage of inventory driving up rents. It is important not to lose any more landlords, which would have a negative impact on supply and result in higher rents.

And Hamilton Fraser chief executive Eddie Hooker made some comments regarding the opposition party’s response: “The most startling statement… did not come from the chancellor but rather from the shadow chancellor, Rachel Reeves, who couldn’t resist his serial attack on the owners and nearly screamed. that they don’t pay enough taxes while their tenants do.

He says: “When will Labor realize that landlords are part of the solution rather than part of the problem? All political parties must embrace the private rental sector and encourage its growth rather than forcing landlords out of the market, which will only add to the cost of living crisis and lack of affordable housing.

Taking a broader look at the event, Altura Managing Director Rob Gill believes that “there is every chance that Rishi Sunak will be back at the shipping box with further economic measures to here too long.

“The cost of living is expected to rise significantly from next month, while the ongoing war in Europe creates additional worries and uncertainties.

Gill concludes, “This budget just wasn’t radical enough given the extraordinary times we find ourselves in.”

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