Autumn Statement 2016
From a ban on letting agents’ fees to a £6.85 billion housing fund, we reveal the impact of Philip Hammond’s first autumn statement…
1. £3.15 billion is being set aside for 90,000 new houses in London.
Mayor Sadiq Khan welcomed the autumn statement investment, the highest ever secured for housing by City Hall, but warned Londoners that they faced “a marathon, not a sprint”.
The Mayor will use the Autumn Statement cash for housing tenures, including those with below-market rents for low-income Londoners and homes with rents set at no more than a third of average local income for middle-income earners.
In addition, there will be more shared-ownership homes to help Londoners who want to buy but can’t afford to on the open market.
2. £1.4 billion is being set aside to deliver 40,000 affordable homes.
Again, there is little detail as to how this will work. The plight of first-time buyers trying to save for huge deposits is widely recognised and, while any help is welcome, property experts are arguing that this scheme doesn’t go far enough because many more homes are needed.
“The measures announced to boost house-building go some way to making the housing market work for everyone, but quite frankly do not go far enough,” says Mark Hayward, managing director of the National Association of Estate Agents.
“The detail in the housing white paper will be crucial – let’s hope there are far more detailed plans in there when it is released.”
3. Letting agents’ fees to be banned in England and Wales “as soon as possible”.
This is welcome move for renters who feel ripped off by high administrative fees, including charges for printing tenancy agreements.
Letting agents are already protesting against the plan and say that the loss of income will simply be passed on in higher costs for landlords, who will in turn pass it on to tenants in the form of higher rents.
However, Stephen Smith, director, Legal & General Housing Partnerships, says: “The implementation of this policy in Scotland in 2012 does not seem to have had a negative impact either on rents or on the availability of private rented accommodation.”
4. A £2.3 billion housing infrastructure fund is being launched.
This is intended to help provide 100,000 new homes in high-demand areas, but Jeremy Leaf, former Royal Institution of Chartered Surveyors residential chairman, says: “There is little concrete detail as to how and when it is going to be delivered and what material difference it will make to the availability of homes so that prices can be kept in check.”
5. There was no reversal of stamp duty charges for second homes or on cuts to mortgage tax relief, as hoped by landlords.
Following April’s stamp duty increases and the announcement of cuts to mortgage relief for rented properties, there has been a decline in the number of landlords buying investment properties.
Some see this as good news for first-time buyers, because it reduces competition in the starter home market, while others argue that this means fewer rental properties will come to market to serve the growing population of renters.