2017 Budget - No Push for the Property Sector
Philip Hammnond’s spring budget may be seen by many as a missed opportunity. There were no plans from the chancellor to support the housing market at a critical juncture in the countries’ history and the package of changes announced this week were cautious and conservative at best. In them a desire for the U.K to “live within its means” and provide a “strong, stable platform for Brexit” was reflected, but it is being hailed by many as too cautious with not enough investment in jobs and infrastructure ahead Brexit. It was certainly not a budget focused on property.
While many had hoped for a rollback of the more unpopular measures introduced by his predecessor, we saw no changes to the stamp duty revisions, or the withdrawal of mortgage interest relief proposals for buy to let landlord. In fact, the lack of any initiatives to support struggling first time buyers, stimulate housebuilding to address housing shortages, or a review of the proposed ban on letting agent’s fees were notable in their absence.
So now that the dust has settled, what impact, if any is the spring budget likely to have on buyers, investors and tenants in 2017? Here are our predictions for the coming year.
- Mortgage deals will remain widely available for buyers with some offering rates as low as 1.14% on two-year fixed rate mortgages, meaning that those looking to move are likely to find a great deal to suit them.
- The demand for housing will continue to outstrip demand, continuing to put sellers in a strong position.
- With £23 million of promised investment in the Midlands for road infrastructure updates, we may see demand for housing in the area increase as the construction industry benefits.
- More property purchased through large investors for the private rental market will increase, with individual investors put off by the greater tax implications of owning a second property.
- The stamp duty levy on properties over £1.5m will continue to see the London market slow.
- UK economic growth is forecast to be 2% this year and we anticipate that property values will set to rise by between 4-5% continuing to make property a sound investment.
- Higher levels of overseas investment in the UK property market are likely as the value of the pound makes foreign investment more appealing.
As people continue to become less reactionary to the news of Brexit we will see more properties coming onto the market and if the early part of the year is an indicator of things to come we expect to see the number of available properties increase further throughout the year.
The Spring budget has, if not wowed us, at least has maintained the status quo of the housing market and it remains to be seen if Hammonds desire to be cautious will pay off in the long term.