Rishi Sunak’s budget was in many ways a familiar one, having been leaked to the media over the past fortnight – something he was reprimanded for as he stood up to speak by Deputy Speaker Dame Eleanor Laing.
Happily for estate agents, most of its measures whether announced before or during Suank’s 60-minute monologue, are unlikely to directly affect their day-to-day activities or incomes.
Consequently there is palpable relief within the property industry that Sunak did not mount a tax raid on any of the major players within the industry – unless you’re a large house builder, but more of that later.
“The Budget was notably lacking in any further provisions to the property market, with the Chancellor likely having one eye on the sales boom ignited by the stamp duty holiday,” says Iain McKenzie, CEO of The Guild of Property Professionals (pictured).
Here we list the handful of measures that do concern those working within the property industry.
Retail, hospitality and leisure firms have been handed a 50% business rates discount by the Chancellor in his autumn budget worth a claimed £7 billion.
But the property industry awaits confirmation that this extends to high street estate and letting agent branches, although some have welcomed the move as an opportunity to ‘level up’ competition between high street and online estate agents.
Other initiatives include more frequent rates evaluations, a cancellation of next year’s planned multiplier increase and incentives to improve property’s environmental performance.
The Residential Property Developer Tax
The chancellor confirmed a £5 billion spend on cladding, funded by a levy on larger builders in order to put right hundreds of tower blocks following the Grenfell tragedy four years ago.
“The Chancellor’s announcement that funds are being put into fixing unsafe cladding, is a vital move to help first-time buyers, who have been stuck in their properties unable to sell them and facing crippling costs,” says Dominic Agace, Chief Executive of Winkworth (pictured).
“The resolution of this has to be a priority, to open up a section of the housing market where people have been unable to mortgage the property and release those looking to move up the ladder. We just hope that this move is enough to cover the scale of the problem.”
End of Help to Buy
Extensions to the government’s Help to Buy scheme have been a familiar feature within budget statements, but not this time. Already announced, the scheme will now close in 18 months’ time. Its subsiding effects on the housing market should be underestimated – for example builder Bellway this week said it would scale down its operations ahead of the scheme’s demise.
“Closing the door on help to bonus will effect developers coffers undoubtedly, but couple this with tax hikes aimed at housebuilders and the very real fact that the flat market is, well, flat, means housebuilders – especially SMEs around the country – might have a tough year ahead and this may be the perfect storm to reduce the number of homes being built,” says Simon Cox of land agency, Walter Cooper.
Green grants for home upgrades
Measure to make the nation’s homes greener were announced last week, but Sunak also revealed that some £3.9 billion is to be allocated to de-carbonising homes, something many lettings and sales agents may get involved in directly as minimum EPC standards are brought in firstly for rented properties and eventually for owner-occupied homes too.
“It is encouraging to see the Chancellor earmark funds for helping homeowners to make their properties more energy efficient, however the current support packages still represent something of a drop in the ocean in terms of what needs to be achieved and more can and should be done to support the move towards greener homes and mass consumer adoption,” says Stuart Law of the Assetz group.
“The new homes industry has been leading the way in meeting the Government’s ambitions for sustainable energy-efficient housing stock, and we anticipate that demand for newer, more environmentally friendly homes will increase substantially over coming months and years, attracting a significant premium as a result.
“Comparatively, older, historic homes could see a reverse in popularity as the additional costs associated with making them greener, as well as reducing mortgage lender appetite to fund inefficient homes, dampens demand and therefore price growth.”
Sunak revealed a further £1.8 billion earmarked to increasing housing supply.
This includes £300 million locally-led grant funding that will be distributed to local authorities to unlock smaller brownfield sites for housing and £1.5 billion to regenerate underused land and deliver transport links and community facilities, unlocking 160,000 homes in total.
“Regenerating brownfield land can be notoriously expensive, so the additional funds to support Councils’ remediation efforts is to be welcomed,” says Nicola Gooch (pictured), Planning Partner at Irwin Mitchell.
“This latest tranche of funding for brownfield land, in addition to the £400 million Brownfield Housing Fund and the £75 million Brownfield Land Release Fund, indicates that the Government may be serious about the ‘brownfield first’ pledges that Johnson made in his conference speech earlier this month.”
Want more detail: Read the Treasury’s full briefing paper.