Published On: Wed, Mar 16th, 2016
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#Budget2016: The prime property industry reacts

“Meh” pretty much sums up a lot of reactions to Chancellor George’s eighth Budget speech. While there was no sugar-coating of SDLT surcharges to second homes and additional properties, no major new policies or additional punitive taxes for the residential market made for quite light weather (relatively speaking) for the high-value property sector…

Read all about what was announced in #Budget2016 here.

Here’s what a selection of our usually-outspoken pundits have to say on #Budget2016.

Lucian Cook, Head of Residential Research, Savills UK

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]Keeping the old rates of CGT on residential property will act as a longer term disincentive to invest in residential property compared to other asset classes[/pullquote]

“The failure to give relief from the additional stamp duty levy for large investors could inhibit the development of a much-needed institutional private rented sector. While purchases of six or more residential properties can be treated as a non-residential transaction, the reform of stamp duty on commercial properties is likely mean greater entry costs for large scale residential investors one way or another. Our recent analysis suggests there will be demand for another one million private rented households in the next five years despite policies to boost home ownership.

“Keeping the old rates of CGT on residential property will make it more difficult for existing buy to let investors (who face a cut in income tax relief on interest payments) to reorganise their portfolios towards better performing property.  It will also act as a longer term disincentive to invest in residential property compared to other asset classes which may put further pressure on the supply of private rented homes against the backdrop of rising demand. That may well put upward pressure on rents.

“The comment [‘Just over a year ago, I reformed residential stamp duty. We moved from a distortive slab system to a much simpler slice system.  And as a result 98% of homebuyers are paying the same or less, and revenues from the expensive properties have risen.’]  that stamp duty take on most expensive property has increased means the rates are here to stay which entrenches some of the issues facing the prime housing markets and means in all likelihood it will remain price sensitive over the next 12-24 months.”

James Bailey, Chief Executive, Henry & James

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]A strong Budget for the British economy, but nothing to boost the residential market[/pullquote]

“The Chancellor has delivered a strong Budget for the British economy. Unemployment is down, the country is being run sensibly and the UK remains in an enviable position compared with many other countries around the globe.

“However, George Osborne has done nothing to boost the residential market with the higher rate of stamp duty applying to second home-owners and now also investors with more than 15 properties from April this year. That said, with a strong economy, even though the OBR has downgraded its forecast for the UK economy, there is an obvious stability which will help in the eyes of the international markets and in particular London remains a safe haven.

“I am particularly delighted with the changes to business rate relief for smaller businesses which are welcome. Our friends in commercial property however may not be so happy with the changes to their stamp duty which is now on a tiered basis as recommended by the IMF who also gave the recommendations to residential changes.

“Nevertheless, the Chancellor has sent a clear message to the world that the British economy is thriving, helping the next generation. Could George Osborne have done more to encourage overseas investors? Yes. Could he have held back or even abolished the imminent residential Stamp Duty changes? Yes. But for now, the residential property sector is not getting the whipping that some might have expected. London offers some of the best properties in the world with an economy that promises long-term growth.”

Trevor Abrahmsohn, Glentree International

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]Pretty well as predicted with very little residential property content apart from the Capital Gains Tax[/pullquote]

“The Budget was pretty well as predicted with very little residential property content apart from the Capital Gains Tax which will certainly interest Buy-to-Let investors who are thinking of crystallising a taxable capital gain due to the changes in mortgage relief for higher income earners introduced in the Autumn Statement of 2015.

“I dispute that income on Stamp Duty is ‘up’ since at the middle to higher end property market activity is down by at least 50% and this would mean less revenue for the Chancellor despite the increases in the actual SDLT rate.

“Frankly, the market for properties up to £700,000 in the UK is as buoyant as any market can be with growth at circa 8%, an incredible shortage of supply and overwhelming demand, if not full blown gazumping. A slight increase in Stamp Duty would have ‘cooled things down’ nicely but the political ‘fall out’ from this would have been toxic.

“In typical artful dodger style I notice that the Chancellor has studiously avoided referring to the Budget Deficit in cash terms (a habit he has always adopted in the past) but instead as a percentage which presumably is much kinder to him since, clearly, he is struggling to get this overall level down particularly with the Economy shrinking and not assisted by the difficulties of the Worlds’ Economies.  One questions the logic of giving away the £27billion found in the last Autumn Statement (due to lower debt costs) so early on in the Electoral cycle, prudence would dictate that he would have kept this ‘up his sleeve’ to be used stealthfully ‘further down the track’ closer to the 2020 Election when the state of the Economy would be better known.

“No mention was made about reforms that will help build more affordable and private homes across the UK which is a very worrying matter for all.  Someone needs to ‘grasp the nettle’ and reform the Planning Process that is holding back a wall of new developments that are much needed by this country as well as selective freeing up of Greenbelt.

“All in all this was a remarkably unremarkable Budget from a Chancellor who is getting increasingly worried that his tenure could be short lived if Brexit comes about after the June Referendum and his partisan comments about this were not lost on the cognoscenti.  He could not resist using this platform to his evident advantage.”

Melanie Leech, Chief Executive, British Property Federation

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]A huge blow to the build to rent sector[/pullquote]

“The Government’s decision to not include an exemption for investors who are purchasing large portfolios of properties for rent is extremely disappointing, and deals a huge blow to the build to rent sector. This is going to be a significant deterrent to the institutional investment currently poised to settle in the purpose-built rented sector, which has the opportunity to deliver a significant number of new, quality affordable homes.”

 Edward Heaton, Heaton & Partners

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]No surprise on SDLT [/pullquote]

“It was no surprise that the Chancellor failed to make any changes to the stamp duty threshold which continues to stifle the top end of the London market. Indeed, the 3% surcharge on second homes will only accentuate that over the coming months. One might have thought that the huge dent in receipts by the Treasury from stamp duty might have encouraged the Chancellor to revise this.”

Gráinne Gilmore, Head of UK Residential Research, Knight Frank

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]The reversal on exemption for large-scale investors is unlikely to lead to a significant dampening of interest[/pullquote]

“The Government’s reversal on the exemption for large-scale investors is surprising, but unlikely to lead to a significant dampening of interest in the build-to-rent sector.

“Bulk purchases of residential units at the lower value end of the scale will be most affected by the Chancellor’s move, which seems counter to the Government’s pledge to provide more affordable housing. But the rental market is an entrenched and growing part of the UK housing market, and as such, institutional investment in this asset class will likely continue to grow.”

Faisal Durrani, Head of Research, Cluttons

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]Constant tax tinkering is an irritant, rather than a deterrent[/pullquote]

“Each time there is an adjustment to the property tax regime, we have noted a 12-month market absorption period, before activity ‘normalises’ and the full impact dissipates. And with the near constant tinkering of SDLT rates and the Capital Gains Tax regime over the past few years, the residential market in London has hardly had time to evolve quickly enough. Furthermore, from our high net worth individual client investor base, we know that the constant tax tinkering is an irritant, rather than a deterrent, which impacts on investor sentiment, so it is quite positive to see no further changes announced in the 2016 Budget.”

Nick Barnes, Head of Research, Chestertons

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]This could be very bad news for renters[/pullquote]

“With the confirmation that the 3% surcharge on second homes and buy-to-let properties is set to come into force from 1st April, we now wait to see whether smaller landlords and would-be investors will find their business models squeezed still further. Larger investors who may have been hopeful of an exemption may also now be discouraged, and altogether this could be very bad news for renters, who quite simply will have fewer homes to choose from if the big landlord sell-off comes to pass.

“The Chancellor also seems oblivious to the fact that his last major reform to stamp duty, in December 2014, meant receipts in 2015 were £662m lower than in 2014 – admittedly around £157m of this was due to Scotland receiving their own receipts from April 2015 rather than going to Westminster, but the loss to the Treasury was a little over £505m, which is still a substantial amount for a Chancellor trying to balance the books.”

Jonathan Mount, Partner, The Buying Solution (London)

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]Perhaps the Chancellor now feels that there are enough levies on the property market[/pullquote]

“I would say that I am surprised and disappointed to see that there will be no exemption from the new 3% SDLT rate for large scale investors, but given the seemingly unending tweaks to taxation in the residential property market that have been made by the Chancellor in recent times I guess I am just disappointed but not surprised!

“To be honest I think those of us in the high-end residential property market in London are probably breathing a collective sigh of relief that there has been nothing more sinister implemented (or mooted!) and perhaps this may be a sign that the Chancellor now feels that there are enough levies on the property market. Just the Mayoral Elections and ‘Brexit’ to worry about now…”

Nick Mead, Partner, The Buying Solution (Home Counties)

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]Missed a trick in that the reduction in CGT hasn’t included residential property[/pullquote]

“It’s a measure of Budgets past we greet this Budget with a degree of relief.

“The Chancellor has missed a trick in that the reduction in CGT hasn’t included residential property. This would certainly have given greater impetus by investors and owners of second homes to release property into the market.

“The changes to SDLT on commercial property are minimal however we hope that we won’t see this rate creeping upwards as it has in the residential sector.”

Andrew Sneddon, Tax and Housing Regeneration Partner, Trowers & Hamlins

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]SDLT surcharge implementation is a huge disappointment[/pullquote]

“Notwithstanding more than 900 responses to the consultation on the 3% SDLT surcharge on second homes, the government has merely offered a few trivial changes. Perceived unfairness from circumstances such as joint family purchases have been ignored. This is a huge disappointment. The government has also increased the SDLT cost of dealing in commercial property.  One can’t help thinking that SDLT is now seen as a cash cow by the government, the UK real estate sector will no doubt be reeling from the latest in a line of numerous tax attacks in the last few years.”

Naomi Heaton, CEO, London Central Portfolio

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]Not bad news for individual property investors[/pullquote]

“Overall, the Budget was not bad news for individual property investors. There were none of the shocks that we have been accustomed to in previous Budget speeches. Investors have already absorbed the inevitability of ARSD and it will only be a matter of time before it is assimilated it into the buying equation, particularly in London. The pain will be felt far more in the regions where the 3% rise represents a significantly greater increase on the existing SDLT rates.”

“For corporate investors, the application of the 3% ARSD was unexpected although there will be some sympathy that the playing field was levelled. In any event, many corporates will be unaffected if they are investing in entire buildings. However, there is a concern that the Chancellor is doing nothing to help develop our essential PRS sector which needs a minimum of 128,000 new units by 2021.”

“The best news appears to be for shareholders in Property Funds and investment companies who should benefit from the new reduced CGT rates. This aligns with the Government’s intention to encourage investors to go into the UK’s PRS through a professional entity, rather than in a private capacity.”

Jake Russell, Director, Russell Simpson

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]A relief to see the absence of any further major upheavals[/pullquote]

“After a number of unexpected reforms to Stamp Duty Land Tax and changes to the taxation of non-domiciles in recent months and years, it is a relief to see the absence of any further major upheavals relating to the property market. It is therefore welcome news that we can continue, in our market, to adjust and acclimatise to the seismic forthcoming changes. We look to an uncertain period ahead, which – with the correct advice and guidance from agents – has the potential to be fruitful for buyers and sellers alike.”

Jennet Siebrits, Head of Residential Research, CBRE

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]Today’s measures will do little to address the housing shortage[/pullquote]

“We are disappointed that the additional 3% stamp duty levy to buy-to-let will also apply to larger investors. The effect of this tax has the potential to deter much needed institutional investment in an embryonic build to rent sector. In turn, it may also further hinder the current  fundamental issue of a under supply of housing.

“The government should instead look to unlock the issues that house builders both in the private and rental sector experience. With a continued rise in construction costs and an underpinning lack of capacity, we have witnessed a 31% fall in building apprenticeships since 2009.

“By better supporting the industry to build more homes, it will allow the Chancellor to meet his targets of over 250,000 new homes each year – the last time this target was achieved was between 1979-1980. We are concerned that today’s measures will do little to address this housing shortage, and may in turn have the potential to discourage vital institutional investment right across the UK.”

Nick Leeming, Chairman, Jackson-Stops & Staff

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]Housing did not take centre stage – which is very disappointing[/pullquote]

“The UK is in desperate need of a housing policy which caters for the long-term, reflecting the future needs of a growing population and changing demand for property type and tenure, which looks beyond the next Parliamentary period. We are also in desperate need of more homes. Today’s Budget was a prime opportunity to outline a progressive policy but unfortunately housing did not take centre stage – which is very disappointing. We need more incentives, and easier processes, for small and medium-sized housebuilders to get building. The construction industry in this country saw a significant slump after the economic downturn, with many industry leaders taking the opportunity to step down. Those skills have therefore been lost and successive governments have introduced few incentives to build them back up.

“Lifetime ISAs, outlined today, are another supportive measure for first-time buyers and are a significant boon for those looking to save for a home. However, this is another measure which boosts demand and today we heard very little about supply – increasing housing supply is key to easing property price growth.

“There was more to celebrate in terms of infrastructure with the news that Crossrail 2 has been given the go-ahead. This is a significant boost for London’s connectivity to key areas like Hertfordshire and Surrey. With average property prices in the Capital now more than £530,000 according to the Land Registry, London is out of price for many. This new transport infrastructure helps bridge the gap by providing more commutable options. Key stations on the line are likely to see a spike in demand, and consequently property prices. Buyers should take advantage early to avoid disappointment.

“The confirmation that there will be a 3% stamp duty surcharge for second home owners is a real blow – and the brunt of this change will be felt by tenants and not landlords. There was no detail given today in the Chancellor’s speech and there are many questions unanswered before April 1st. However, our analysis shows that house price inflation over the next year will absorb stamp duty costs for landlords under the new regime in eight out of 10 regions across England and Wales, so the intended deterrent effect of the new policy is limited. Where landlords don’t want to shoulder the additional stamp duty cost, this will be passed on to their tenants in the form of rent – effectively making this a tenants’ tax.”

Mark Parkinson, Director, Middleton Advisors

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]Should provide a confidence boost[/pullquote]

“The lack of further taxation measures directly effecting prime property in this budget should provide a confidence boost to buyers in this beleaguered market place (certainly in central London).  Hopefully this is a signal that the Chancellor has decided that he has pushed property taxation as far as he can.”

Richard Bernstone, Director, Aston Chase

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]A ‘playing it safe’ budget[/pullquote]

“A very lack lustre ‘playing it safe’ budget with the usual sin tax increases and little else which has any direct impact on the property market.

“What was clearly needed but not mentioned was a further revision of the punitive SDLT rates which have clearly cut deeply into the London property market resulting in a considerable reduction in transactions.  In addition to affecting the fluidity of the market this has and will continue to affect all the associated trades who rely so heavily upon it – from solicitors to builders to decorators to furniture suppliers etc.

“The Chancellor did, however, confirm the details of the additional 3% SDLT liability for landlords and those seeking second homes following the consultation period – but nothing less than we had been led to expect.

“Just need to figure out Brexit next …..and after that …who knows!”

Jonathan Harris, Director, Anderson Harris

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]Any potential loopholes have been well and truly closed[/pullquote]

“With the Chancellor announcing that the new 3% stamp duty rate on additional properties will also apply to larger investors, as well as those buying via a limited company, any potential loopholes have been well and truly closed. However, going forward more investors are set to buy via a limited company and lenders will need to catch up with the changing face of buy-to-let as most of them offer few options on the mortgage front to those buying via a company. This will have to change – and quickly – if they wish to grow their buy-to-let lending book.”

Mark Harris, Chief Executive, SPF Private Clients 

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]The property industry will be sighing with relief [/pullquote]

“The property industry will be sighing with relief after this Budget pretty much left it well alone.

“The tweaks made to stamp duty on commercial property make it a fairer system and even the higher top rate is unlikely to deter investors. It is more likely to be absorbed into the cost of the asset.

“In future, more buy-to-let purchases will be made via limited companies even though in a shock move a policy statement supporting the Budget confirmed that those buying inside a limited company will still be hit by the 3 per cent stamp duty surcharge. Arguably the changes in mortgage interest tax relief were always the biggest hardship for landlords so moving an existing portfolio into a company still makes sense for many investors as corporate entities will remain able to offset mortgage interest against their tax bill as a business expense.”

Adam Challis Head of Residential Research, JLL

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]Private renters have once again been overlooked[/pullquote]

“New Stamp Duty changes will impact large investors without exemption. This is an extraordinary lost opportunity to support the growth of Build to Rent and undermines this nascent sector. Private renters have once again been overlooked.

“Garden suburbs are a more practical, deliverable approach to solving the UK’s housing crisis than the wholesale Garden City. The programme will need a lot of engagement with local communities if it is to be welcomed but could be a big step in the right direction.

“Further support to save a deposit to buy a home is great news for first-time buyers.”

John Elliott, Managing Director, Millwood Designer Homes

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]Nothing new or valuable for the property market was introduced[/pullquote]

“Apart from funding for the much-anticipated Crossrail 2 and strengthening of the Northern Powerhouse, what the Chancellor said today was old hat. Disappointingly, nothing new or valuable for the property market was introduced.

“I still think that it is wrong to add a 3% tax onto second homes or buy-to-let. It will most likely have the effect of subduing the property market when the Government want it to be more robust! It is hard to see how it will make a difference to the balance of property available on the market for other buyers. It seems to me this is purely a revenue raising exercise for the Exchequer. Those investors with just one or two properties seem to be the ones that are unduly penalised when they have had the reclaim of interest costs removed from their investment and they still pay capital gains tax upon disposal.

“There also seems to be blurred lines between the definitions and distinctions of what the changes to stamp duty mean. We need further clarity still. Buying and selling now costs too much money, unless you are in the lower price ranges. However, as markets improve as a result of the stimulus, those individuals wishing to trade up is where the stamp duty blockage occurs. Having eased problems for the lower end of the property market, the Government should now stop fiddling with taxation for average property transactions.”

David Hannah, Principal Consultant, Cornerstone Tax

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]Higher SDLT will hinder first time buyers and families[/pullquote]

“‘Act now so we don’t pay later’ and ‘put the next generation first’ are two phrases in today’s Budget announcement which stood out as completely contradictory to the government’s new higher SDLT tax going ahead in 1st April. While the notion of a second home tax isn’t necessarily a bad one, the higher SDLT will have devastating long-term effects, penalise home owners and families, wage war on home owners and is widely discriminating.

“It seems evident from today’s announcement that the Government simply haven’t listened to their own consultation. Aside from ensuring larger investors do not escape the additional three percent SDLT, the Government has pushed forward with a new tax which will have the exact opposite effect of the chancellor’s stated goal of helping the housing market. It will instead punish first time home owners and hit families across the board, hampering future generations who are already desperately trying to claw their way onto the property ladder the only way they can – with help from their relatives.

“This change will strip back the ability of the “Bank of Mum and Dad” to do this, hindering parents and families who simply can’t afford to offer a huge lump sum in place of taking on joint ownership. It will also unfairly penalise those in unavoidable ownership situations such as divorce, separation or inheritance.

“For many foreign investors – the very demographic the chancellor claims to be a major contributor to the housing crisis, this additional three percent is unlikely to act as a deterrent from coming to the UK; what it instead does is pose a significant barrier to our domestic first-time buyers, investors and regular families. Rather than help first time buyers, these measures increase competition and raise prices for the middle and lower ends of the market.

“While it is true that with every new law or tax, there are likely to be unavoidable casualties, for a new tax to hit so many and so hard is inexcusable. This new tax is ill thought out and founded on wrong assumptions, and will not only fail to achieve its aims, but introduces yet more needless complexity into the UK tax system, discriminating against homeowners across the board.”

Ian Wilson, CEO, Martin & Co plc

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]Reducing capital gains tax to discourage further growth in the private rental sector is poor policy making[/pullquote]

“Reducing capital gains tax to discourage further growth in the private rental sector is poor policy making, which simply opens a golden window of opportunity that could encourage people to buy second homes or buy-to-let properties. Currently, buy-to-let properties appeal because of the mix of rental returns and capital gains particularly in London and the South East. Reducing CGT is another incentive to buy. Some landlords might be interested in selling to make the most of this window, but if the properties have a strong track record of staying fully let at good rents then the most likely buyer will be another landlord. We are heading towards consolidation of ownership amongst landlords, who will set up companies to avoid additional tax implications and continue to make additions to their portfolios – the reduced Capital Gains Tax burden on exit will simply fuel this.”

Robin Paterson, Chairman, UK Sotheby’s International Realty

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]I didn’t expect Osborne to reverse any of the residential Stamp Duty measures introduced last year[/pullquote]

“The reduction in capital gains tax reduction is good news for the housing market as it will encourage people to sell their second homes and buy-to-let properties, particularly in London where the top end of the market has slowed. The stamp duty changes have probably affected the market more than the Government expected and the easing of capital gains will be seen as a more astute solution. Whilst this change in capital gains tax is a positive signal, it does not fundamentally change the underlying punitive stamp duty taxation when acquiring a property, which is the biggest deterrent to the market. Agents across the UK will be hoping that this positive change provides a stimulus to the market as it encourages activity by reducing the amount sellers are taxed. I didn’t expect Osborne to reverse any of the residential Stamp Duty measures introduced last year, which have already had a significant impact on the market. As a consequence, the transactional levels within the London market have fallen by circa 40%, and the market has started to see a correction in property values across all sectors.”

“I am pleased that the chancellor has announced that Crossrail 2 construction will go ahead. This is excellent news for the capital as we will see pockets of accelerated growth emerge, much like we have seen around Crossrail stations such as Ealing and Slough. The new route will provide a huge boost to neighbourhoods such as Clapham and Tooting in the south, cutting journey times to The City of London in half and I would expect a future jump in prices to reflect this.”

Andrew Bridges, Managing Director, Stirling Ackroyd

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]Today might be a starting point in tackling the complex planning system[/pullquote]

“The Chancellor is chancing London’s status as a world-leading capital. What Londoners needed today was a bold move to free the capital from housing uncertainty – but what we got was mainly a bigger bet on the same status quo.

“If incremental, the direction of travel seems correct. Today might be a starting point in tackling the complex planning system. A more integrated effort between local councils and central government may help. Too often, the multiple stages of planning applications deter builders, and deny Londoners new homes.

“But the biggest problem will be transforming attitudes. Across 2015, London borough councils rejected 23% of potential new homes. Even if everything goes exactly as hoped-for in the latest Mayoral plan, London will face a minimum yearly shortfall of 6,450 – a massive 13% of the new homes needed unless boroughs exceed targets.

“Policies to increase density on brownfield sites is good news and should encourage more development. Higher density buildings near the centre of London provide the key for housing – helping more people onto the ladder. But again, the practical means by which this is done still needs to be fleshed out.

“The Chancellor may have a long term plan for the economy – but a viable long term plan for housing in London remains to be seen.”

Graham Davidson, Managing Director, Sequre Property Investment

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]The message is more clear than ever; the north is open for business[/pullquote]

“Money has always followed transport and the announcement of much needed East-West connectivity improvements in the region will pave the way for further investment, creating more jobs and opportunities. This will result in increased demand for property, providing a positive outlook for buy-to-let investors who are chasing returns that have been squeezed out of London and the South East.

“Since the Northern Powerhouse agenda was first touted two years ago, our own business has seen a circa 30% rise in interest in northern property at a granular level – with many  millions being invested further up the chain at a global level in residential and commercial projects. The message is more clear than ever; the north is open for business.”

Susan Emmett, Residential research Director, Savills

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]We would need to change planning policy and attitudes to density[/pullquote]

“Crossrail 2 can help deliver 200,000 homes by acting as a catalyst for development and regeneration, but only if communities accept higher densities.  Intensifying land use might not be an issue in post industrial areas that are being regenerated but could face local opposition in semi-rural locations adjacent to the Green Belt.

“Savills research shows there is tremendous potential to increase density in London. We calculate that theoretically there is the potential to deliver 1.46 million new homes in London by building at higher densities.  Furthermore, our analysis highlights that the greatest opportunities are in the outer boroughs.

“The big question will be whether the affected communities are ready to embrace this brave new world.

“They must be reassured that delivering higher densities does not require turning Shepperton into Singapore. Done well, higher density can bring benefits by enabling better shops and services that support vibrant communities. A design-led approach where the focus is on creating attractive places along traditional street patterns must surely be  the way to go.

“We would need to change planning policy and attitudes to density to fulfil this target. Design-led approach is therefore crucial.”

Cory Askew, Executive Director, Chestertons

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]The ‘we are the builders’ line is beginning to ring hollow when it comes to delivering on housing[/pullquote]

“Infrastructure investment, including the announcement that Crossrail 2 will definitely go ahead, will have been welcome news to many London homeowners – whenever new transport projects start moving, so do property prices – but the ‘we are the builders’ line favoured by Mr Osborne is beginning to ring hollow when it comes to delivering on housing. UK house-builders may welcome a clamp-down on international developers funnelling profits abroad, but if that ultimately means overseas investment into the UK dries up and fewer new homes are built, then first-time buyers and hard-pressed renters will be the real losers.

“We would have liked to see more emphasis being placed on bringing more land forward for development and lifting barriers on house-building in terms of easing red-tape and planning laws and boosting access to finance to allow new entrants into the market – addressing the chronic shortage of homes available for would-be home-owners to buy is the only way to really boost the affordability of home-ownership and keep rents rises to a minimum in the long-term.”

Vidhur Mehra, Finance Director, Benham & Reeves Residential Lettings

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]This won’t help[/pullquote]

“We had desperately hoped that Osborne would listen to reason and scrap his plans for this extra 3% stamp duty.  It is unfairly singling out landlords – many of whom are simply trying to shore up their retirement income. Amateur property developers are not the enemy and given that the government has said that further investment is needed in the private rental sector, this won’t help.”

Stuart Law, CEO, Assetz for Investors

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]Uncertainty has been removed from buy-to-let taxes[/pullquote]

“In my view, the uncertainty has been removed from buy-to-let taxes in today’s budget.

“The Budget has clarified that the 3% additional stamp duty will apply to second residential properties that are bought by individuals and companies alike. It has become a cost of investing in the best asset class for several decades and at the forecast growth rate of 5% in house prices this year will take just 7 months to get back! So let’s move on.

“In addition it still looks like companies that are used to purchase buy-to-let property will be able to fully offset their mortgage interest against income and achieve full tax relief. The many and varied company tax reliefs such as a 17% tax on profits and capital growth could also mean that setting up a company actually made matters better for a BTL investor than before the tax changes when investing privately.”

Martin Bikhit, Managing Director, Kay & Co

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]If forecasts are correct, London’s property market should be ring-fenced against any tremors in the global economy at large[/pullquote]

“It was pleasing to see that the Office for Budget Responsibility has predicted a steady growth rate in the British economy of around 2% until 2020. This, when combined with the announcement of the Crossrail 2 north-to-south train line through London will positively effect the London property market, as we have seen areas such as Paddington benefit from investment and rising property values due to the original Crossrail.

“We welcome the announcement that Capital Gains Tax is to be cut, as it allows greater investment into London; we hope to see more people investing in the London property market  as a result of this policy. Unfortunately, the higher rates of Stamp Duty Land Tax that were announced in 2015 and the 3% surcharge on buy-to-let properties and second homes will continue to stifle the property market in London.

“The announcement of a policy to help the redevelopment of brownfield land that is currently owned by local authorities is laudable, as it will help to create more affordable housing within London. Due to the location of these brownfield sites, we hope that the development will be organic; and benefit the local communities around the brownfield sites.

“In the main, if the economic growth forecasts referred to by the Chancellor are correct, and if the UK economy can continue to grow as it has been doing then that, combined with the international cache of London as a centre for culture and business should ring-fence the London property market against any tremors in the global economy at large.”

James Roberts, Chief Economist, Knight Frank

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]Today’s Budget saw the Chancellor giving with one hand and taking with the other[/pullquote]

“As expected, today’s Budget saw the Chancellor giving with one hand and taking with the other. His preferred route for taking was stealth taxes. The giving comes in the future – you can pay less to cross the Severn in 2018, while the promised railways are many years from ever running a train. Nevertheless, the news on business rates will help small high street retailers, and strengthen the finances of firms on light industrial estates. Plus the stated determination to cut corporation tax further will help keep the UK a preferred target for international investment, which benefits all types of property.”

Mark Tunstall, Managing Director, Tunstall Property

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]Transaction costs in London still compare relatively favorably to those in Hong Kong or Monaco[/pullquote]

“We have seen around 25% more applicants looking to rent ultra-prime homes in central London over the past quarter versus the same period last year; this is attributable not only to continued impact upon the sales market of the last round of Stamp Duty Land Tax changes, but also because of current uncertainty surrounding a possible ‘Brexit’ and the impact that could have on property prices. Conversely, on the supply side we have seen our rental stock levels increasing by around 20% as both would-be sellers and ultra-prime developers opt to let out their properties given the dramatic slowdown in the sales market for prime central London homes priced at £5m and above.

“Another reason for the increase in applicant levels is that a number of London property owners, who would previously have sold and bought a larger or more expensive property to move up the ladder, are now deterred from doing so by what they perceive to be prohibitive stamp duty levies and as a consequence have chosen to refurbish and enlarge their existing properties. Naturally, they tend to want a rental property of the same standard as their own home to live in until the refurbishment is complete.

“As a result of the slowdown in the sales market, we have been approached by a number of developers and even other agents, who have been keen to work with us to find suitable tenants for their or their clients’ properties, generating some fairly impressive returns into the bargain. Whilst average gross yields in prime central London are currently around 2.8%, in some cases we have been able to achieve more than 4%: it is clear that tenants are prepared to pay a premium for quality turnkey stock of a standard that previously was found only on the sales market.

“Many property experts would – in an ideal world – have liked the Chancellor to repeal the recent stamp duty changes, although for political reasons this is highly unlikely to happen. The ultra-prime lettings sector, which has already had a fairly buoyant couple of years, is therefore likely to continue to benefit.

“Moreover, the Chancellor’s decision not to cut the amount of Capital Gains Tax paid by investors on buy-to-let properties in today’s Budget is likely to further deter landlords from investing in new stock, which can only put upward pressure on rents.”

“Looking ahead, however, from an international perspective we believe that London will continue to attract both overseas investors and end-user buyers because even when the additional 3% of stamp duty is added to the UK property tax bill from April 1st, transaction costs in London still compare relatively favorably to those in Hong Kong or Monaco, where the property market is more stringently taxed.”

Jane Duncan, President, RIBA

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]There are too many unanswered questions about how the Government plans to address the housing crisis[/pullquote]

“The changes to the rules on business rates and national insurance contributions will be well received by RIBA architects working on their own or at smaller practices.

“Planned investments to infrastructure projects in London and the North of England are a welcome boost to capacity. Further devolution deals will be an ideal opportunity for architects to work with communities on housing, planning and transport issues that ensure we get more high quality affordable homes for everyone. I’m also pleased the importance of protecting our homes and businesses against flooding has been recognised.

“But, there are too many unanswered questions about how the Government plans to address the housing crisis affecting every part of the country. Councils need to be given greater borrowing powers to invest in new housing. The continued focus on home ownership means that there are huge parts of the market where private developers and housing associations either can’t or won’t invest.”

Elizabeth Bradley, Head of Corporate Tax, Berwin Leighton Paisner

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]Much of the British property industry will be very disappointed[/pullquote]

“Much of the British property industry will be very disappointed with today’s Budget changes. The property sector is effectively being used to placate the Government’s back benchers.

“The Chancellor has acknowledged the need to build more homes but the extension of the extra SDLT rate on buy-to-let to large investors will discourage investment in the private rented sector.

“Overall, increased tax costs will not be offset by the reduction in corporation tax rates to 17% by 2020.”

Brian Berry, Chief Executive, Federation of Master Builders

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]These announcements are limited in scope and won’t signal the step change that we need to see[/pullquote]

“The Government has set itself a target of a million new homes by 2020. That is rightly ambitious, but the continuing gap between what’s being built and what needs to be built makes hitting that target more difficult by the day. Official statistics show that annual housing completions in England totalled just over 140,000 in 2015, a long way short of the 200,000 homes we need every year to hit one million. We are nearly 12 months into the current Parliament and the Government is already falling well behind on its targets. We recognise that the Government is working on a number of fronts to speed up the planning process and intervene to support first time buyers, and some of the measures in today’s Budget are welcome steps forward. Yet these announcements are limited in scope and won’t signal the step change that we need to see. We cannot afford to lose momentum in the battle to beat the housing crisis.”

Darren Yates, Head of Research, Carter Jonas

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]The new Crossrail infrastructure will allow London to become more ‘polycentric’ [/pullquote]

“The 3% stamp duty surcharge on second homes and residential investment was confirmed as applicable to large-scale investors, as well as smaller players.  This is despite the fact that many in the industry lobbied strongly against it.  The surcharge is an additional headwind for the larger, institutional investors, many of whom are committed to the sector long term and could play a key role in improving housing supply in the next few years.”

“The rise in stamp duty for commercial property above £500,000 to 5% causes concern, and will likely act as an additional pressure on the commercial market, particularly at a time when the economic outlook is becoming more uncertain.

“In contrast, the reduction in stamp duty for smaller lot sizes could make commercial property a more attractive proposition for smaller-scale private investors, who may be looking to diversify their investment portfolios with the addition of commercial property.  However, this type of investor accounts for only a small proportion of the market, and most players in the commercial sector will find the changes unwelcome.” 

“Confirmation that the Crossrail 2 project will go ahead is hugely welcome as it will further support the capital’s property market.  While the West End, City and Docklands will remain London’s core office markets for the foreseeable future, Crossrail 1 and 2 will help the growth of emerging office market locations across the city.

“The new rail infrastructure will allow London to become more ‘polycentric’ by improving accessibility to and from more peripheral locations, effectively creating a more diverse range of commercial hubs in the capital.  Importantly, it will give occupiers more choice by opening up access to cheaper office locations, notably those small and medium-sized businesses currently struggling to pay the high rents in central London.

“The announcement that the HS3 link between Manchester and Leeds will go ahead is a much needed boost for the ‘Northern Powerhouse’.  With much of the recent rail investment focused on London and the South East, HS3 will undoubtedly boost connectivity and growth in the UK’s key northern cities.

“High quality infrastructure is crucial in supporting business growth and the property market.  It allows people to move around more efficiently and enables businesses to tap into a wider pool of labour and consumer spending.  Some estimates suggest that HS3 will cost around half the £15bn spent on London’s Crossrail 1, which seems like good value if we can get the UK’s key northern cities joined up on high speed rail.”

Santhosh Gowda, Chairman, Strawberry Star Group

[pullquote align=”left” cite=”” link=”” color=”” class=”” size=””]It is challenging to summarise whether these Budget proposals would adversely or positively impact the property market[/pullquote]

“The Chancellor has tried to provide a progressive Budget – which many are terming as the ‘Budget for the Next Generation.’ While many of the proposals are welcome, there is a mixed bag for the property market in the UK.

“One of the important decisions taken is that the large-scale investors in buy-to-let properties will have to pay 3% stamp duty surcharge from April this year. While many feel that this was necessary, it is a bit contrary to a suggestion made in the Autumn Statement that those with more than 15 properties would be exempt from paying this stamp duty surcharge.

“There is a major relief for investors in commercial properties. Rates of stamp duty land tax for commercial property will be in the lower bands, with a zero rate for properties valued at £150,000. As a consequence, a majority of the small business owners will directly benefit from the lower stamp duty on commercial properties. A proper analysis reveals that exemption will be provided to properties worth up to £150,000, there will be a 2% levy on the next £100,000 and then 5% for properties of £250,000 or more. This may have a far-reaching impact as it is expected to raise £500m revenue annually to the government.

“As of now, it is challenging to summarise whether these Budget proposals would adversely or positively impact the property market. International investors may be bothered about optimum return on investments in the UK property market, but their concerns can be addressed if they find the right investment partner in London.”

The House of Commons in the early 19th century by Augustus Pugin and Thomas Rowlandson.

The House of Commons in the early 19th century by Augustus Pugin and Thomas Rowlandson



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