Most home owners, landlords and first time buyers are not confident targets set in the recent Budget will be met, or that it will address the current house building crisis.
The Budget announced an extensive house building agenda that would see an extra 300,000 homes a year being built by the mid-2020s, a 100% increase in council tax for empty properties, and an exemption on stamp duty for first time buyers.
But a poll taken in the days after the Budget by Property Price Advice has found that first time buyers were split on the announcement that stamp duty would not apply to their first home providing it was less than £300,000 or the first £300,000 of any property under £500,000.
A property sold at £490,000 to a first time buyer would therefore pay stamp duty of £9,500 under this scheme, whereas a property sold at £510,000 would pay £15,500 in stamp duty regardless of who bought it.
Around 53% were encouraged by the news and felt they would be able to buy their first home sooner as a result, whereas 26% stated it wouldn’t affect their purchasing decision. A further 21% felt it actually discouraged them, with one noting that flats in London are often substantially above the £500,000 cap.
In addition, 44% of first time buyers stated that the Government isn’t doing enough to help them buy, with one noting that much of the problem lay with the issue of salary multiples, particularly for those working in critical services.
Empty properties have been the target of substantial criticism, yet landlords were broadly confident. The majority would factor any additional council tax costs into the rent if this affected them, with around 29% stating that it wouldn’t affect them anyway. One noted that there should be a mechanism to evaluate why properties are empty, stating that there could be reasons other than just a lack of will to let it out.
The majority, some 71% of respondents, believed that targets were unlikely to be met with respect to house building. Respondents commented that a greater volume of cheaper homes were needed, but they were unlikely to be built because of the need for higher margins, with land values and land banks being perceived as a problem. One of the solutions announced in the Budget was to remove the cap on Housing Revenue Accounts for certain local councils, which may go some way to solving this issue.
Another area of concern was in planning laws, with 61% stating that planning laws do affect the number of houses being built. A similar percentage stated that greenbelt planning permissions should not be relaxed, with many commenting that brownfield sites should be used instead. Brownfield sites proved to be a popular solution, primarily because there was a perception that derelict sites were an eyesore and that they were underutilised.
A large number questioned the Budget’s aims and claims relating to housing. Many felt that the priority should be focused on planning reform, prioritising social housing and utilising brownfield sites, and a large proportion felt that the stamp duty aspects would not affect them.