The property industry has indicated that the government has failed to offer long-term support for energy efficiency improvements or increase the Local Housing Allowance in its Spring Budget, announced on 15 March, and instead it has focused on getting the country back to work.

Chancellor Jeremy Hunt extended support for energy bills at current levels of £2,500 for a further three months and brought the charges of the 4m people on pre-payment meters in line with comparable direct debit charges.

However, he made no mention of the hoped-for incentives for landlords and homeowners to make properties greener in the run-up to changing EPC rules. Housing groups will also be disappointed that he made no announcement about helping renters meet a shortfall in their payments through unfreezing LHA.

As part of its reform of the welfare system, the Chancellor promised that for those on Universal Credit – 2m job seekers – sanctions would be applied more rigorously to those who refuse to look for work. The earnings threshold would increase from 15 hours per week to 18 hours.

Parents on Universal Credit will now receive up to £951 for one child and £1,630 for two children per month, which would be paid upfront. The government’s childcare reform plans should help those tenants with children under five who will get 30 hours of free childcare a week from the end of maternity leave.

As previously announced, corporation tax will rise from 19% to 25% on 1st April, affecting portfolio landlords and those with limited companies. However, no tax burden relief was offered to the sector, but neither was the rumoured increase in Stamp Duty.

For those landlords looking to the future, Hunt announced an increase in the pensions annual tax-free allowance from £40,000 to £60,000 while he also abolished the Lifetime Allowance – previously set at £1.07m.

Industry reaction
Following the Spring Budget, Brendan Sharkey, head of construction and real estate at MHA, says the lack of affordable housing is as big an issue for the economy as the four E’s: “Unfortunately, the four “E’s” do not deal with one of the key issues facing the economy, namely the lack of housing, particularly affordable housing.

“Housing is basic human necessity and wherever you look there is a shortage. The growing number of homeless people, the frenzy when accommodation is made available for renting and the increasing cost of renting all bear this out. For housing, there is a big disconnect between the what the sector needs and government policy.

“All the major house builders are publicly saying they will build fewer houses this year than last year. What we needed from the Chancellor was a stimulus for the housing market. Unless our housing stock increases significantly, the problem will only get worse. Stamp duty reductions and tax relief on mortgage interest for first time buyers would have really helped but the budget did not address these issues at all.

“In addition the government wants to see an improvement in the quality of housing stock. However, it is not doing anything to help with supply and the enforcement of Minimum Energy Efficiency Standards (MEES) could mean that some housing becomes unlettable. The lack of incentives for retrofitting such as VAT exemptions and grants and financial support such as soft loans is hard to understand."

Brian Comer, chairman at Comer Homes Group, says: “We are disappointed not to have seen the implementation of further support for homebuyers in the Budget, especially in the current economic situation. There has been a noticeable drop in enquiries since the Help to Buy initiative ended and the New Homes Scheme doesn’t seem to have the same appeal, so this is something that could and should have been addressed. The cut to the capital gains annual exemption will also have an impact on downsizers and potentially decrease their spending power, which could have a serious impact on the market.

“More worryingly, the sector has been grossly mismanaged in recent years, with the revolving door of Housing Ministers testament to that, which has led to serious issues developing within the planning system. The ability to successfully take major developments through planning has become a costly and time consuming exercise, often requiring appeals and adjustments that cause further delays."

Paul Cosgrove, director at London-based estate agency, Finlay Brewer, says: “Whilst there are bigger issues the Government is looking to address, with this Budget very much focused on the Cost of Living crisis and improving the health of the public purse, we feel this was a missed opportunity to help invigorate the property market.

"A healthy and active market will only boost the economy and at the moment one of the hardest suffering groups is landlords, with more and more selling up and moving on due to rising costs and increased legislation. This is impacting the level of rental stock available and in turn driving rents upwards and therefore initiatives to ease the load and cut some of the red tape, whilst encouraging investor landlords would have been greatly welcomed.”