Richard Ponton, Investment Director at Walton Robinson gives us a round-up of the housing market announcements in the Chancellors Spring Statement.
Philip Hammond announced the Spring Statement on Tuesday 13th March, in this 26-minute speech he claimed there was “light at the end of the tunnel” in the UK economy, although austerity would not be ended immediately. Mr Hammond pledged a sum of £44bn to be allotted to help increase the UK's housing supply by 2020.
London is set to receive £1.7bn for the construction of 26,000 new and affordable homes with a further 16,000 low-cost homes expected to be built in the capital by 2022. Mr Hammond also pledged in his speech that the West Midlands will benefit from 215,000 new homes by 2030.
Richard Ponton, Investment Director
Philip Hammond, Chancellor of the Exchequer
Since the stamp duty relief was announced in the Chancellor’s November 2017 Autumn statement, around 60,000 first time buyers have apparently benefitted from these savings. If purchasing a home under £500,000 the relief allows buyers to pay no Stamp Duty on the first £300,000.
According to the Office for Budget Responsibility (OBR) the stamp duty measures were expected to cost around £125M in the remaining months of the 2017-18 financial year, leading into 2018-19 it was expected to cost £560M and due to increase to £670M in 2022-23. In reality, the OBR believes this has reportedly cost the government between 15% - 20% more than anticipated. Full details on the costs to the government are expected in the next few months, including the first official HMRC statistics due in April.
Theresa May also announced earlier this week that one of the top priorities for the UK government following Brexit is to tackle the country’s housing shortage and make the dream of homeownership a reality for more people. The Prime Minister announced new draft planning policies and placed blame for lack of housing on local authorities and planning departments. Admitting the size of this challenge at a time when property prices continue to increase, Mrs May commented; “The result is a vicious circle from which most people can only escape with help from the bank of Mum and Dad. If you’re not lucky enough to have such support, the door to home ownership is all too often locked and barred.”
James McDonnell, the Shadow Chancellor, gave a critical response to the Spring Statement, commenting that Hammond has “failed to lift a finger” to help struggling local authorities and the NHS.
The Chancellor has said that once the economy starts to improve, he can then start setting aside more money for public services. He stated that he would use Autumns budget announcement to outline the expenditure expectations post-Brexit. In his speech, he said that the economy is on track to grow a little bit faster this year in comparison to previous years, despite the prospects for weaker growth in the medium term.