BUDGET DAY: Underwhelmed PRS speaks out over a missed opportunity

BUDGET DAY: Underwhelmed PRS speaks out over a missed opportunity

14:50 PM, 15th March 2023, About 12 months ago

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It was a Budget to forget after the Chancellor Jeremy Hunt appeared to have forgotten landlords, tenants and the private rented sector (PRS) in general.

Despite hopes that there would be an announcement how the PRS is taxed – which might help the 30% of landlords who say they are planning to sell up in an NRLA survey – there was also no mention of abolishing section 24.

In fact, there was not a lot for landlords to enjoy.

Goodlord’s Tom Mundy said: “Today’s Budget will have raised eyebrows across the sector.

“Not because of a controversial policy announcement, but because property and housing were completely overlooked.”

‘This critical sector barely got a mention’

Tom continued: “As the nation faces a housing squeeze, rising rents, and a potential exodus of landlords, this critical sector barely got a mention.

“We hope that this isn’t a true reflection of the Government’s priorities.

“If decision makers overlook housing, tens of millions feel the effects.”

The chief executive of Octane Capital, Jonathan Samuels, said: “The government has made numerous legislative changes to ‘improve’ the rental market at the expense of the nation’s landlords, changes that have ironically led to higher rents, less accommodation and lower standards.

“We were hoping that they had finally realised the error of their ways and wanted to once again tempt buy-to-let investors back into the fold.

“Unfortunately, this hasn’t been the case and, with them also pushing forward with changes to Capital Gains Tax allowances, we expect to see more landlords exit the sector as a result.”

‘We wanted to see more from the Chancellor’

Jeremy Leaf, a north London estate agent and a former RICS residential chairman, said: “We wanted to see more from the Chancellor, particularly with regard to increasing supply of new homes to keep prices in check, as well as increased support to encourage new landlords and discourage others from leaving the sector.

“In some ways, it could be seen as a positive Budget in that the Chancellor left the housing sector well alone.

“Housing makes such a significant contribution to economic prosperity due to its multiplier effect so is sensitive to even small changes.”

‘Told not to expect a Budget with sweeping changes’

Adam Oldfield, the chief revenue officer at Phoebus Software, said: “We were told not to expect a Budget with sweeping changes and unfortunately, as far as the housing market is concerned, that’s exactly what we got.

“There were measures to alleviate the rising cost of living and get more people back into work, which may give a boost to confidence.

“However, it is clear that the growth the government is expecting to see from the measures announced in the budget is not expected to come from the housing market, despite growth being a priority.”

He added: “Once again, despite many calls for change, the Chancellor has skipped over stamp duty land tax.

“The antiquated tax is a costly barrier but unfortunately, at over £14billion last year, it contributes far too much to the Treasury’s purse.”

‘Treading water since last September’s shambolic mini-Budget’

The managing director of House Buyer Bureau, Chris Hodgkinson, said: “The property market has been treading water since last September’s shambolic mini-Budget and we were looking to the Spring Statement for a shot in the arm that would reignite the furnaces of buyer demand and help negate any prolonged period of subdued activity.

“Unfortunately, this hasn’t materialised, and the nation’s homebuyers have been shown the cold shoulder once again.

“While we expect the market to hold fairly firm over the coming year, it’s extremely unlikely that house prices will now rally, and the pandemic highs of previous years will be resigned to the record books.”

‘There doesn’t seem to be anything in this Budget’

Tomer Aboody, a director at property lender MT Finance, said: “The housing market has settled down after the fallout of the mini-Budget and thankfully there doesn’t seem to be anything in this Budget to upset the apple cart.

“There are fewer transactions as rising interest rates and the cost-of-living mean affordability is more of an issue but the real concern around transactions is that they are taking so long.

“It would have been good to see some reform of stamp duty, particularly for downsizers, to encourage more transactions but the Chancellor has chosen not to intervene at this stage.”

He added: “The OBR forecast for inflation at 2.9 by the end of the year is extremely welcome and will have a further settling effect on the market should this prove to be accurate.

“It already looks as though interest rates may have peaked or are close to doing so, and inflation falling so decisively will help with that.”

‘Bewildering absence of support for first-time buyers and the property sector’

Ben Woolman, a director at property firm Woolbro Group, said: “The bewildering absence of support for first-time buyers and the property sector is a catastrophic misstep for the Tories which could cost them in the next general election.

“The Government is fully aware that it is more difficult than ever to get onto the property ladder, yet its inaction is paving the way for a potentially devastating defeat at the next general election — and the opposition knows this.

“Labour is already drawing up battle lines by announcing it will seek to reform Britain’s outdated and ineffective planning system, sending a clear message of support to the property sector.”

He added: “The Tories have kicked the can all the way to the end of the road.

“To stand any chance of winning over the votes of first-time buyers, it must start taking the housing crisis seriously.”

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