There was little focus in today’s budget on the housing market, with the most important news being confirmation of development on brownfields and a tax on large home builders to fund the removal of the coating.
Specifically, Chancellor Rishi Sunak said £24bn would be earmarked for housing, of which £1.8bn would be spent to commission 1,500 hectares of brownfields and £11.5bn to fund up to 180,000 new “greener” homes on brownfields.
He also confirmed that the removal of hazardous coatings will be partly funded by a Residential Property Developers Tax, a 4% levy on developers with profits over £25m.
Benham and Reeves manager Marc von Grundherr said: “The Chancellor has chosen to give the sector a bit of a cold shoulder with just a handful of headlines, clearly believing his job is done after fueling prices from real estate at record highs via the recent duty leave stamp.
“We need more homes to satisfy our ever-increasing appetite for property and an insignificant level of brownfield development is more of a slap in the face than an outstretched hand.
“As for the £11.5bn pledged for 180,000 affordable homes, that is a start, but hardly news given that it was announced by Robert Jenrick a year ago.
“It’s just not enough and with the government consistently failing to meet its previous housing construction targets, it will be a miracle if we see a brick laid on a brownfield site or a significant level of affordable housing delivered over the course of the year. of our life.”
Audley Group Chief Executive Nick Sanderson echoes that sentiment. He says: “The Treasury’s announcement of 160,000 greener homes on brownfield sites again shows that the government is totally missing the point when it comes to housing market issues.
“They have no will to address the root cause of the problem and that will just mask the cracks yet again, allowing a broken system to remain broken.
“In today’s budget, there are no details about the types of homes the government wants to see built, yet that is the real question that needs to be addressed. We have enough houses. That was never the problem. Government attention must shift to specialized housing, and fast.
“It will both free up homes, while simultaneously reducing pressure on stretched care services. It will never be greener to build more, when the solution is to build smarter. »
However, Just Mortgages national operations manager John Phillips says that “in this case, no news is good news”.
He explains: “While some may have called for a stamp duty review, inaction is actually positive for the market.
“Last year, transactions were artificially inflated by tax savings and the pandemic, and since the return of the stamp duty, the urgency has diminished, but the demand has remained.
“In the coming months, we will begin to have a true reflection of the state of the mortgage market. Lenders are sending positive signals with the number of 95% LTV products currently available. While some experts are rightly cautious, the abundance of low-deposit products suggests lenders don’t believe a price crash is imminent.
“The imbalance between buyers and sellers reinforces this position. There are still more than ten buyers for every property listed, and although a significant sum has been allocated for new homes, these will take years to build and in the meantime prices will continue to rise.