Autumn Statement: Online property lenders call for more support
ONLINE property lenders heralded the £7.2bn investment in housebuilding confirmed in the Autumn Statement, but called for more support for the sector.
Among the initiatives announced were a £2.3bn housing infrastructure fund to deliver up to 100,000 new homes and a £1.7bn investment to speed up housebuilding on public sector land, through partnerships with private sector developers.
There were no changes to stamp duty in Wednesday’s mini-Budget, despite property lenders calling for a reduction to the three per cent surcharge on second homes that former Chancellor George Osborne had imposed.
“A £7.2 billion injection for the construction of new homes is most certainly a step in the right direction for addressing the chronic supply/demand imbalance facing aspiring homeowners priced out the market,” said John Goodall, chief executive and co-founder of peer-to-peer lender Landbay, which specialises on the buy-to-let (BTL) market.
“However, such measures won’t bear fruit overnight – even 2020 may not be a realistic target if past pledges are anything to go by.
“In the interim, it’s vital that the private rented sector, one that is depended on by 5.1 million households across Britain, is supported. It’s encouraging to see no further taxes imposed on the sector – but Hammond could have gone further to relieve the rental pressure on Generation Rent.”
Online mortgage lender LendInvest, which like Landbay is a member of the Peer-to-Peer Finance Association, heralded the chancellor’s investment drive but called for a reconsideration of stamp duty in the government’s upcoming housing white paper.
“When we asked property professionals what they’d most like to see in the Autumn Statement last week, it was revision of the stamp duty land tax for BTLs and second homes that topped the poll,” said the company. “By avoiding addressing this, small scale property professionals will continue to be challenged.
“The soon-to-be published housing white paper will be an opportunity for government to address the impact of the stamp duty changes. Small scale property professionals will be waiting to see whether the housing minister does include considerations of its effects.”
Earlier this month, official figures showed that the number of affordable homes being built in England had fallen to a 24-year low. However, data last week showed that overall housing supply rose by 11 per cent in the year to April 2016.
“After a several years of seemingly endless property tax reforms, the absence of new announcements on property taxation today suggest the new chancellor wants to let existing reforms bed in before opening them up for review,” said Liam Bailey, global head of research at high-end estate agent Knight Frank.
“This lack of action leaves unaddressed the drag on market liquidity caused by high stamp duty. The Office for Budget Responsibility’s own data confirms they are expecting further falls in transaction volumes, their new forecast suggests transactions over the next five years will be 230,000 lower than they expected as recently as March this year – the issue of falling market activity is set to become a larger issue and will need addressing.”