So, the Autumn Statement has been and gone, and we’ve all had time to digest the announcements. As we saw, the rumours leading up to the big day proved to be true. Or at least, some of them did.
Among the biggest announcements included major benefit adjustments, a cut in National Insurance, and various tax changes. Property wise, investors now need to factor in planned increases to Local Housing Allowance (LHA), tax cuts for the self-employed, housebuilding and conversion schemes, frozen business rates, and more.
But, for many, it was what wasn’t included that had the most impact. Most in the market, the wider economy even, had been calling for more substantial changes and reforms for years now. Hopes were raised that Jeremy Hunt, with tax receipts high and inflation low, would have room to deliver large-scale reforms.
Examples might have included drastic plans to build more houses, finally hitting that 300,000 target. Or, for landlords, there could have been an update on the Renters Reform Bill or more specifically, Section 21 rules.
“An opportunity missed”
Alas, such announcements didn’t materialise. An opportunity missed, as our CEO Paresh Raja argued.
“You cannot begrudge the Chancellor’s focus on supporting businesses and consumers with tax reforms, but from the perspective of the property market, it was a somewhat uninspired and unimaginative statement,” he said.
“Speeding up the planning process and potentially making it simpler to convert houses into flats will be welcomed by some landlords, investors, and developers, but more detail is required. Meanwhile, a more drastic overhaul of the planning system seems to have been abandoned, which feels like an important oversight.
“The lack of meaningful property-related announcements is disappointing, given there had been rumours of stamp duty cuts over the weekend. This was a real opportunity to breathe life into the market and help catalyse growth at a time when economic markets are gradually improving, but that opportunity was missed.”
As we reached out to other industry insiders, however, we discovered a mixture of optimism and pessimism among stakeholders.
“Oh, is that it?”
Jeff Knight, founder of Mortgage Marketing Forum, was also left uninspired by the Autumn Statement.
“I would sum the Autumn Statement up as ‘oh, is that it?,’” he said.
“The revised economic outlook shows the knife-edge we are on, and we need long-term solutions, not quick fixes.
“Focusing on the housing market would have been a great way to kick-start economic growth.
“Whether that means incentives for housebuilders to build more affordable homes, or solutions for landlords. I think an opportunity has been missed.”
As Mr Knight highlights, many in the housing market may have been left subdued by the apparent lack of long-term thinking. But, others believe we’ve taken the right steps to get our economy back on track.
Michael Street, managing director and founder of Word On The Street, explained: “Ultimately, the government’s main focus remains to be the UK’s economic recovery from the COVID-19 pandemic, with key objectives to ensure inflation continues on a downward trend, cutting taxes & backing British business.
“For the specialist mortgage market in particular it’s fantastic to hear the additional investment being plunged into the property market; including a package of £3 million for a range of measures to improve the home buying and selling process.
“It’s even better to see that the government is taking a serious stance on the outdated and ineffective planning system by ensuring a full reform, aimed at speeding up approvals, and removing barriers towards investment in critical infrastructure to ‘unlock new commercial development’ opportunities.”
“The 110 growth measures outlined in the Autumn Statement have the potential to positively impact the UK’s real estate sector”
Mr Street noted this was a long overdue and welcome reform. One in which his mortgage brokerage firm would be keeping an eye on for the sake of its colleagues, as well as its customers.
Juliet Baboolal, a dual qualified lawyer specialising in real estate, agreed that the announced reforms could have wide-reaching positive implications for providers and consumers alike.
“Overall, the 110 growth measures outlined in the Autumn Statement have the potential to positively impact the UK’s real estate sector, especially for developers and SME homebuilders,” she said.
“The mortgage guarantee scheme, the proposed permitted development rights in respect of house-to-flat conversions as long as the exterior is unchanged, proposals to overhaul the planning system to speed up the processing of applications – all demonstrate a commitment to fostering growth and addressing key challenges in the industry.”
The outlook
We’ll have to wait and see to find out how these changes truly affect the economy. Whether they hinder progress, or hasten it.
Of course, all the 110 measures announced could be rendered moot by the summer. A general election could happen as early as spring 2024.
And with Labour polling well ahead of the Conservatives, we’re likely to see an entirely new government by the end of next year. One with different plans for the economy, taxes, and the property market.
As always, the only way to prepare effectively for all this is to prioritise flexibility. By being adaptable in the face of uncertainty and shifting legislation, service providers will have the best chance of giving their customers what they need.
At MFS, we’ve embraced this principle since our founding in 2006. No matter how the economy moves, or what announcements are made, we’ll be ready. We hope the rest of the industry will be too.
Disclaimer
MFS are a bridging loan and buy-to-let mortgage provider, not financial advisors. Therefore, Investors are encouraged to seek professional advice.
The information in this content is correct at time of writing.
