Waterfords reaction to Autumn Statement
Waterfords reacts to key announcements on housing from the Autumn Statement
As chancellor George Osborne’s Autumn Statement unveils the “biggest house-building plan of any Government since the 1970s”, estate agents, Waterfords, says the market needs more short-term solutions, as well as those that build for the future.
Is response to news that investors in property will face higher stamp duty on buy-to-let and second homes, Brendan Cox, Managing Director of Waterfords says:
“Buy-to-let landlords have already been delivered the blow of lower rate tax relief on mortgage payments from 2017, so to add a further 3% surcharge on stamp duty charged for a second home or buy to let property, is not good news for the market. Whilst there is a notable shortage of homes available to buy, the demand and supply imbalance is also visible across the rental sector. Instruction levels are already at growing odds with rising demand, so in my view, deterring investment in property will ultimately lead to less private sector rental stock. In turn, this will put further upward pressure on rents and make life even tougher for tenants financially.”
In response to announcements that the government will double the housing budget from 2018 to 2019 to deliver at least 400,000 affordable homes; including 200,000 Starter Homes, 135,000 new Help to Buy Shared Ownership homes and 10,000 Rent to Buy homes, Mr Cox says:
“Naturally, anything which supports people getting onto the housing ladder is great for the market and the economy. However, the market needs action now, and I am struggling to see how this will solve any problems in the short term with stock. Yes, this will encourage a greater number of first time buyers, who are essentially the life-blood of the market, but they will be buying new homes, therefore that’s where the chain ends. There will be no domino effect further up the market unless incentives are offered to buy ‘re-sale properties’.
Longer term, however, could be a different story as these new entrants to the market will sell on their houses in years to come. One school of thought is, if there is going to be a flood of new starter homes coming to the market, it could have a calming effect on prices, particularly the lower end of the market.”