What does today’s Spring Statement have in store for the real estate market?

Rishi Sunak

Chancellor Rishi Sunak is due to deliver his spring statement later today, which could include surprise announcements ahead of the new fiscal year in April.

The spring statement is often used as an opportunity to take stock of the health of the economy and to launch consultations on possible future government plans.

But there is growing pressure on the government to provide more aid to households, amid the cost of living crisis.

But what can we expect from the Spring Statement in terms of housing?

Jeremy Leaf, North London estate agent and former RICS residential chairman, said: “Better balance in the housing market will help control house prices; as we emerge from Covid restrictions, anything that encourages new supply is helpful, especially that of affordable homes to buy or rent.

“What happens in the sales market is reflected in rentals – there is a shortage of stock, so rents and prices are rising, and it is important not to lose any more owners. We don’t want to see any further disincentives for landlords because, as we’ve already seen, this speeds up the sale of properties, negatively impacts supply and leads to higher rents.

“Help to help reduce the backlog in the justice system in terms of possession and anti-social behavior would be welcome. We want to care for and support Generation Rent, but landlords also need to be able to weed out difficult tenants.

“A resolution to the siding crisis would help release more properties on the market as owners who want to move can finally sell. It is often the most affordable properties, especially apartments, that appeal to first-time buyers.

“Stricter anti-money laundering rules would be a popular move, but there are many good rules that are not being enforced. We hear of so little action under the current regime.

“The focus is likely to be on heat pumps, with almost certain subsidies, but there’s no point in doing that unless there’s enough consumer buy-in and trust in the product, which is not the case at the moment. Consumers are worried about the maintenance and upkeep of heat pumps and there needs to be more confidence around their operation.”

Timothy Douglas, Head of Policy and Campaigns at Propertymark, points out that the Spring Statement is a good platform for launching a number of consultations.

It highlights the main issues currently facing the housing market, both in the sale and rental market, namely supply, affordability and energy efficiency. There are a number of ways taxes can be used by the UK government to alleviate these problems.

Douglas said: “In the sales market, the SDLT thresholds are outdated and should be reviewed based on house price developments. In the rental market, landlords are feeling the brunt of the tax changes of recent years and this too needs to be rethought. For renters, affordability is an issue, especially for those on Universal Credit. LHA rates simply don’t keep up with market rents and tenant payments are designed at complete odds with the workings of the private market.

“In 2021, energy efficiency was a top priority across all homes, sales, rentals and businesses. To make the changes feasible, financial support must be introduced. Reducing VAT on green home improvements would not only help people reduce emissions in their daily lives, but also give businesses a boost and help the property sector meet new energy efficiency standards. imminent.

Meanwhile, the British Property Federation (BPF) has set policy demands ahead of the Spring Declaration to create what it describes as ‘a greener, fairer and more affordable future’.

The BPF calls on the Chancellor to use today’s Spring Statement to take action to support the Government’s ambitions to upgrade the country, decarbonise the economy and alleviate the cost of living crisis being felt by millions of people.

The BPF has highlighted three key actions:

A greener, low-carbon future

Remove VAT on repairs and maintenance of residential buildings, to ensure that the tax is not an obstacle for anyone wishing to improve the energy efficiency of their own home.

Use capital cost allowances to accelerate tax breaks on renovations and energy efficiency improvements.

Dynamic city centers

Accelerate the renewal of our main streets through downtown investment zones.

Pursue corporate rate reform by increasing the frequency of reassessments, extending empty rate relief, and eliminating downward staggering.

Housing of the nation

Stimulate institutional investment in affordable housing.

Temporary halt to all housing tax reassessments of multi-occupancy homes.

Melanie Leech, chief executive of the British Property Federation, said: “The government is committed to achieving net zero carbon by 2050 and creating a more economically balanced and socially just society.

“The real estate sector has a vital role to play in achieving both of these ambitions and we urge the Chancellor to use the Spring Statement to accelerate investment and action.

“With the public and private sector working in partnership, we can revitalize our main streets and town centers and help businesses and individuals reduce their carbon footprint.”

Penny D. Jackson