Jeremy Hunt delivered the Autumn Budget announcement in the House of Commons today, with a focus on stability, growth and public services through the recession. The goal of the Budget is to create a steady path during the recession and cost of living crisis, with the Chancellor stating that “difficult decisions” are ahead. Our clients were quick to react, providing their thoughts on the measures and the impact they envision on the property sector.
Lynda Clark, CEO of First Time Buyer Group, acknowledges the uncertainty for first time buyers, commenting: “A second budget in as many months, and I can’t help but feel concern for the next generation of homebuyers who have been swept up in this game of Monopoly.” This being said, not all hope is lost for prospective buyers looking for their first step on the property ladder, Lynda continues, “I would remind first time buyers that there are still many options available to help them, including shared ownership, which provides a low-cost route to homeownership. Newer schemes include Deposit Unlock and the First Homes scheme, and the stamp duty cut which will remain in place for the next two years, which will see first time buyers pay no stamp duty on the first £425,000 on the value of their home.”
Tim Sargeant, Chairman of City & Country Group Plc shares Lynda’s worries on the impacts on first time buyers, adding: “We are inevitably heading for a downturn in the property market and given that first time buyers are severely disadvantaged with the sudden interest rate rises, it seems strange for the Government to stick by the decision to end Help to Buy – a tried and tested scheme.”
Though the last emergency Budget in September focused on housing, the latest announcements left some of our clients dissatisfied with the lack of direction. Simon Cox, Managing Director of Walter Cooper, comments: “I’m disappointed in the lack of housing policy included in this announcement. With ‘growth’ stated as one of his key priorities, I think this is a missed opportunity for the Chancellor. Building more houses is a vital step in industrial and economic growth. I’m sad to say that developers and housebuilders have a hard few years ahead of them, I can only hope that housing will play a bigger role in the next budget announcement in the Spring.”
Edward Heaton, Founder and Managing Partner of buying agent Heaton and Partners echoes Simon’s thoughts, stating: “There is nothing within the Budget that I believe changes the fundamentals of the property market as we head into a recession. We must anticipate some pain in the coming year and it remains to be seen how much this will or will not impact on the prime property market.”
It wasn’t all doom and gloom though, with John O’Malley, Chief Executive of Pacitti Jones, based in Scotland, remaining optimistic on the future of the property market stating: “The Chancellor has had to make some hard decisions but if the new measures steady the waters, a gradual softening of the market is more likely rather than the hard crash some people were predicting. Regardless of what is going on in the world, people will always be aspirational and there may be some who will take advantage of any reduction in demand to trade up to their dream home. Who knows, we may very well even see the return of fixed prices to the second hand market as people look for stability.”
Reflecting from an international perspective, Daniel McPeake, Managing Director of Nest Seekers in Europe, acknowledges a “50% rise in enquiries last month on September figures from American buyers and are seeing interest follow the same pattern from other areas of the world. We will continue to closely monitor shifts in the market in response to today’s Autumn Statement, especially for our clients abroad who are looking to invest and take advantage of a weaker pound but ultimately are confident in the strength of the UK property industry as we now look to 2023.”