At 12:30 pm today, Chancellor Rachel Reeves will deliver her update on the economy as well as any progress made since last October's "painful" Budget.
Ahead of the widely touted "Definitely not a Budget" event this afternoon, the property industry has been sharing some of its hopes as to what might (or might not) happen.
Timothy Douglas, Head of Policy and Campaigns at Propertymark, said, “With housing playing a key part in the UK Government’s plan for change, the Spring Statement must ensure government policy protects the delivery of more social and affordable housing and local authorities have the resources they need across planning, enforcement and infrastructure.
“Policymakers must also fully understand the need to reform housing benefits so they reflect real rental costs, and the UK Government must continue to target resources to tackle the cladding crisis and improve building safety to help boost economic growth.”
Wayne Douglas, MD at City & Country, comments, “The recent extension of the Home Building Fund for SMEs is a step in the right direction, but restrictive rules still prevent many smaller housebuilders from accessing the loans they need. This scheme alone isn’t enough. The Government must go further by offering zero or low-cost finance through Homes England, available to all SMEs, not just those rejected by commercial lenders.
"This could really level the playing field, taking away an unreasonable level of risk to make smaller, potentially more tricky schemes, like urban brownfield sites and empty retail spaces, into viable projects for smaller housebuilders, that would never be of interest to the largest players.
Without suitable finance support from the Government, these sites will remain untouched, and the Government’s 1.5 million homes target will be out of reach.”
Rebecca Wilkinson, Partner at Menzies, said: “The threshold above which first-time buyers are required to pay SDLT was temporarily increased on 23 September 2022 from £300,000 to £425,000. This increase is scheduled to come to an end on 31 March 2025. First-time buyers find it increasingly difficult to get onto the housing ladder and are priced out of many areas.
"There are fears that reducing the SDLT threshold back to pre-September 2022 levels will cause house sales to stall. The Government should extend the increased SDLT thresholds beyond 31 March to support the housing market.”
And on crapping the upcoming NI increase, she added: “Realistically, scrapping the increase is not likely to happen, but it’s expected to add an estimated 0.75% to 1% to construction costs according to market reports. Although this doesn’t seem like a large increase, when taken together with forecast inflation, the BCIS building forecast predicts that building costs will increase by 17% over the next 5 years. These costs will have to be passed on, making construction projects more expensive and potentially increasing the cost of new homes. Scrapping the increase would help to control price increases.”
Mark Michaelides, Chief Commercial Officer at Molo Finance, said, “First and foremost, we’ll be looking out for the latest set of economic forecasts from the OBR, in particular its projections relating to inflation and government borrowing, and how these feed through to broader market sentiment.
"Our BTL market continues to be highly sensitive to these economic indicators. While we don’t expect a great deal on policy or reform, we’ll be hoping for further detail on how the government looks to achieve its ambitious housebuilding targets in addition to any green initiatives to support EPC improvements.
"We might expect some first-time buyer support to soften the blow of the upcoming stamp duty threshold changes. Separately, we await the FCA’s consultation on stress tests rules, which will inevitably be informed by the government’s ‘pro-growth’ approach to the matter.”
“Historically, such adjustments have led to market volatility, with a surge in transactions preceding the implementation, followed by a slowdown. This pattern not only disrupts market stability but also places undue pressure on buyers and industry professionals alike.”
Bradley Post, MD of RIFT, commented, “Whilst the Government has been vocal in its ambitions to deliver a higher number of homes to the market, they’ve done very little to help those homebuyers already struggling with the high cost of homeownership.
"The failure to extend current stamp duty relief thresholds will further increase the cost of buying for a significant proportion of the market, but unfortunately, it seems as though calls to extend these relief thresholds beyond the end of this month have gone unanswered.
"However, we would see a further bump to second home stamp duty costs which would act as a further deterrent to the nation’s landlords.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says, “While the economic climate remains unsettled both at home and abroad, investors and developers are reluctant to act. Uncertainty is the enemy of investment.
"Here, deep cuts to welfare benefits, increases in defence spending while interest rates, inflation and borrowing remain high, mean extra funding for private housebuilding, renting or other parts of the industry is unlikely. Employer worries about the imminent rises in national insurance and the minimum wage will weigh just as heavily on those who may have otherwise considered taking on or adding to existing finance too.
"Given this background, the Chancellor’s options are limited and the Spring Statement is probably just as much about what she does as doesn’t do, as far as property is concerned. More than anything, we don’t want Rachel Reeves to compromise existing buyer and seller activity but do want her to further support growth where possible.
"A steady rise in the number and pace of transactions is not only good for the property market but for the economy in view of the multiplier effect on jobs and social mobility. In particular, first-time buyers are pivotal as they regularly trade up, releasing 'second steppers' as well as connecting chains.
"Overall, no silver bullets, please Rachel, as small steps can still make a significant difference."