Property expert shares what to expect from housing market now
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The ‘baked-in’ unfairness continues. Right now not enough homes are being built. Mortgages are up, rents are up and rentals are becoming more scarce. It is almost impossible to rent and save a deposit. There is a growing inequality between those with property (or well-off parents) and those without. Many feel they have no hope of ever owning their own home with the benefits and stability that brings. Mr Hunt, perhaps for financial reasons or for political expediency, is clearly taking the much longer-term view.
Enabling young parents to return to work will feed through in to increased borrowing ability.
Increasing pension thresholds will allow the Bank of Mum and Dad to offer higher loans and gifts to their children.
For the short to medium-term, opportunities to level the playing field have been missed. Mr Hunt could have rebalanced Stamp Duty to free up property stock, penalised developers who sit on land waiting for price growth, and offered tax breaks for landlords who insulate their tenant’s homes or offer long-term lets.
None are especially expensive and each would have an immediate and positive impact on property buyers and society as a whole.
There are many ways the Chancellor could have better utilised stamp duty. Around £1billion a month is paid by homebuyers but despite tapering and exemptions for most first-time buyers, the system now needs a total overhaul to make it fairer.
Overseas buyers currently pay UK stamp plus two percent – we’d like to see an increase to generate revenue and help level the field for local buyers.
Mr Hunt could have reduced stamp duty in areas of deprivation to encourage investment. And he could have offered Stamp Duty relief to pensioner-sellers moving down market to homes with fewer bedrooms.
This could have freed up much-needed larger homes for families.
I’d also have backed moves to offer tax incentives to landlords who upgrade energy saving measures to save their tenants money on heating.
The Chancellor should also look to increase taxes on land sold for development and invest it in local improvements and infrastructure.
The impact of the housing crisis is at the heart of many of the issues that vex the Government right now.
A lack of homes makes people less tolerant of immigration. Poorly insulated homes are bad for the environment and increase inflation. Disenfranchised younger people feel they have a lesser role to play in society.
And many put off having children because they can’t afford the right home, and others cannot pursue dreams of a better job because they can’t afford to live in an area where pay and conditions are better.
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That’s why it is all the more surprising that a Conservative has not taken the opportunity to create more homeowners, something generally thought to make people more likely to vote blue.
For me, the Budget was more about what wasn’t done, than what was. Those who were hoping for good news on housing, will now have to wait another long year to find out what crumbs of comfort might be thrown their way.
With so many pressures, the Energy Price Guarantee, childcare, food price, fuel duty and Corporation Tax is Mr Hunt, like so many before him, taking his eye off the property market? That’s my big fear. He must remember that even though it is distorted, inherently unfair and on a knife edge, the UK property market provides the Exchequer with enormous amounts of cash, pension funds with money to pay the elderly and a roof over the heads of most of us.
The gap between wages and house prices has widened from three times the average wage, for an average home, to 14 times currently.
Deposits are near impossible to save as rocketing rents eat the spare cash of those striving to save for a home.
For those in the industry, or those who watch it closely it is clear that there is growing dissatisfaction and disenfranchisement from young people who look on with despair at the generations above them who have accumulated so much of the property market.
Jonathan Rolande is a property expert and professional property buyer.
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