Hew Edgar, head of RICS UK government relations & city strategy, says: “There is lots in this budget to applaud and the Chancellor has clearly been listening to RICS - particularly with the long term review of business rates which needs to happen quickly for firms to plan ahead, and the £1bn cladding remediation fund which will give more leaseholders and homeowners certainty and ensure where they live is safe.
“Levelling-up the country isn’t about what is said at the dispatch box, but the £600bn to be spent on new infrastructure stands to transform all parts of this country – however we must learn the lessons of projects like Heathrow and Cross Rail to ensure this is delivered effectively for taxpayers. Our professionals can help ensure projects that make a real difference to peoples’ lives are delivered on time and on budget.
“Delivering green, new housing required an ambitious approach to VAT – not superficial tweaks to stamp duty – so we’re disappointed the Chancellor didn’t support the property industry to retrofit thousands of buildings, turning them into places people would have loved to call home.”
Randeesh Sandhu, CEO at Urban Exposure, tells us what he believes the budget means for the housing sector and impact on the UK’s housing shortfall: “It is positive that Government and the Bank of England appear to be acting in unison to tackle fundamental challenges on boosting UK housing, however every Government of recent years has talked the talk, but walking the walk has proved much harder. The National House Building Council (NHBC) recently revealed that 161,022 homes were built last year and while housing completions have steadily increased year on year, the statistics still bring into focus how far there is to go to get to the Government’s 300,000 annual new homes target by 2025.
“Stamp duty hikes are never popular and can cause market distortions – some areas will experience a foreign buying spree until April 2021 before the hike is implemented followed by a possible slump. We’re really pleased there’s been a focus on innovating the planning process and cash committed to bringing brownfield sites forward for development – both of which will assist developers across the country to build more, faster.”
2% SDLT surcharge for non-UK residents
Caroline Takla, founder of London buying agency, The Collection, says: “A new decade, a new chancellor, but not a lot has changed in regards to the Budget addressing the prime property market – unless you are an international purchaser, which a significant number are!
“The previous increases to SDLT were the catalyst for a marked slowdown in the market, so this isn’t the most positive news to come from Mr. Sunak’s announcement. It will be an important brief for the UK Government to make the country as enticing as possible to internationals post-Brexit whilst our new relationship with the EU is established. This 2% SDLT surcharge being actioned in the same year we’re supposed to leave the transitional period with the EU will certainly not help things. Moving forward, those that are committed to or remain interested in purchasing a home in the UK will factor in the additional surcharge and likely keep it in mind when negotiating on price, so I expect to see a few price drops and deals below market valuation taking place.”
Mark Hayward, chief executive at NAEA Propertymark, says of the Government’s plans to introduce a 2% stamp duty surcharge for non-UK residents: “If introduced, this policy allows those in the UK to have a better chance at purchasing a home. However, overseas buyers tend to purchase properties in prime central London which are completely unaffordable to most homebuyers anyway. Therefore, this move will not help those that need it most. Ultimately, by energising surcharges, it is likely that purchasers will factor this additional cost into any offers they make on a property so prices may be pushed down in areas where overseas buyers are purchasing.”
Guy Harrington, CEO of property lender Glenhawk, says: “Confirmation of this additional surcharge, which will materially impact the top end of the market in particular, a valuable source of income for the treasury from all over the world, appears misguided. The Chancellor’s focus should be on measures that will stimulate the housing market and support current and potential homeowners right across the pricing spectrum and, just as importantly, in all parts of the UK.”
Matt Probert, head of tax at Savills Investment Management, comments on the new tax treatment of asset holding companies in fund structures. He says:“It is both welcome and long overdue. Despite the reforms to the substantial shareholdings exemption in recent years, the UK remains uncompetitive as a holding jurisdiction for international real estate funds, which has resulted in a shift of holding and fund management activities to other jurisdictions. We look forward to seeing the outcome of the consultation and hope this is the first step to a more level playing field.”
Construction industry can’t quibble
Brendan Sharkey, head of construction and real estate at MHA MacIntyre Hudson, says the Chancellor has succeeded in spreading new work around the country: “Without question the budget is good news for construction overall; the measures to develop infrastructure, particularly new roads, flood defences and broadband will complement existing investment to ensure companies have enough work. Particularly welcome is the £1.1bn in funding earmarked for different regions of the UK through the Housing Infrastructure Fund; this will guarantee work for owner managed businesses outside the capital.
“No change to Help to Buy is also positive news because of the support it provides to the housing market. However, the Stamp Duty surcharge on non-UK residents is very unlikely to fulfil the government’s stated aim to keep house price inflation in check; the extra cost won’t deter most foreign buyers because they can offset the small additional cost by buying when the exchange rate is favourable.
“The cloud on the horizon is labour. It’s unclear whether the industry has the workforce for all the upcoming infrastructure projects and the new immigration system creates more uncertainty. Notably the Chancellor did not announce reliefs or grants for capital investment, which would have been one obvious way to mitigate the labour issue.”
First aid Budget for Britain’s builders, says FMB
Brian Berry, chief executive at the Federation of Master Builders (FMB), says: “The Chancellor has delivered a ‘first aid Budget’ to overcome the short-term crisis caused by COVID-19. But he has missed an important opportunity to announce interventions that would support the sustainable, long-term recovery construction needs. The autumn Budget must include measures to cut VAT on repair and renovation, and a National Retrofit Strategy to promote decarbonisation and create jobs and growth.
“Builders are increasingly concerned about the impact COVID-19 will have on their businesses. This package of measures to support SMEs through refunding Statutory Sick Pay, making temporary loans and grants available, and support for the self-employed will provide welcome relief to small building businesses and their workers alike.”
Berry concludes: “An investment of £13.7bn in housing is welcome news. However, there was no mention of how the Government plan to support SME house builders. Master Builders are facing major barriers finding land, accessing finance and skilled workers – these will all need addressing if we are to build 300,000 homes a year.”
Impact on the high street
Scott Harkness, head of commercial at Carter Jonas, says: “Given the possible impact of Coronavirus on our high streets, we welcome the proactive approach outlined in the budget. Measures announced – including the pause on business rates for the next 12 months for England’s retail, leisure and hospitality firms with rateable values below £51,000 – will have a real and meaningful impact for businesses on our high streets. What’s more, it’s clear the importance of place making remains a priority amidst other competing pressures. Creating a vibrant environment, which has the interests of the whole community at its core, is critical. Pubs are very often at the centre of communities, so we’re pleased to see the Chancellor is freezing all alcohol duties for another year.”
The regions can “future-proof” the economy
Owen Michaelson, CEO at Harworth Group, a land and property regeneration specialist in the Midlands and the North of England, comments: “We welcome a number of the announcements made by the Chancellor. The regions have a significant contribution to make in future-proofing our economy and improving the nation's productivity. Commitments such as significant investment in infrastructure, including rail; a £400m brownfield fund to support the development of new homes; and a significant increase in Research & Development spending will directly support its delivery. We are also delighted that the Chancellor backs further devolution into the regions, including the long awaited West Yorkshire deal.”
With the government’s commitment to significantly raise infrastructure spending to level up ‘new roads, railways, broadband and homes’, David Delaney, chief executive at new property stock exchange IPSX, says: “It’s great news that the Chancellor is committing so strongly to improving Britain’s infrastructure and to levelling up the imbalance between London and the regions.”
Lastly, the Residential Landlords Association (RLA) and the National Landlords Association (NLA) are still calling for the Chancellor to scrap the stamp duty on the purchase of additional homes. In a joint statement, the RLA and the NLA said: “The Government is undermining its own efforts to boost homeownership through its attacks on the private rented sector. By choking-off supply and making renting more expensive it is tenants who are hardest hit. Ministers need to wake up to the reality of the damage their tax measures are doing to the private rented sector and support landlords to provide the new homes for private rent we desperately need.”
