Chancellor’s measures are welcome but we need to look beyond home ownership to address housing shortage
Kersten Muller, Real Estate Tax Partner and Jenny Brown, Head of Housing at Grant Thornton UK LLP
"Following the July emergency budget which rocked the housing sector to the core, the Autumn budget and spending review had some more positive news (not much - but there was a glimmer). The government finally seems to appreciate that the housing crisis needs to address supply not just demand.
"We welcome the measures to increase supply of housing, in particular rented housing. Measures introduced today included the redesignation of public land and certain commercial land, a relaxation of planning restrictions, and the sell-off of public assets (most notably prisons). The government announced the building of 400,000 new homes which includes Starter Homes, Help2Buy, Rent2Save and additional homes for older and disabled people. Further measures would have been welcome and we encourage this issue to remain in the spotlight, especially the collaboration between public and private sector to supply affordable and private rented homes.
"Our concern is that the rented sector is still not being prioritised. In today’s society there are many people who either cannot afford to buy (whether now or ever) and those who do not want to buy for variety of reasons. The challenge for the UK remains to build a fully-working institutional rented sector to support social mobility and a vibrant economy.
"It is surprising to see private investors being hit again with an increased stamp duty land tax rate on purchase and quicker payment of capital gains tax – investors provide the majority of private rented housing in the UK at present. Whilst we recognise the need for a professionally-managed rental sector and the benefits of a reduction in empty homes, there is a danger that private landlords will pass on additional costs or cut maintenance spending.
"The new house-building programme will benefit the UK economy although there will be challenges along the way, in particular the skills shortage in the construction industry. New construction methods such as modular homes therefore need to be embraced to meet these ambitious targets. It is also a great opportunity to improve employment opportunities and skills development for the younger generation.”