The Chancellor of the Exchequer’s Autumn Spending Review and Budget provided some good news for property agents but leaves a lot to be desired.
The UK Government missed a golden opportunity to reshape an outdated Stamp Duty Land Tax system to reflect rising house prices and remove some of the market distortions it causes.
It was further disappointing to see there is no reform of the court system to deal with the volume of possession hearings – an estimated 62,000 just in England and Wales alone – or proper funding for landlords so that calls for energy-efficiency improvements on an older private-rented stock are financially viable, and not just hot air.
A rise in the national living wage is good in principle but with inflation expected to top 4 per cent by the end of the year, higher household bills from the on-going energy crisis, a cost-of-living squeeze, and the cut to Universal Credit, it is unlikely to provide the boost to incomes that’s needed.
The £65m funding for those in rental debt provides some support but the devil is in the detail. Almost four million low-income households are in arrears with their household bills, yet this money will be targeted at those who are most at risk of homelessness, excluding a significant number of others from help.
A £1.8bn fund for brownfield homes and £11.5bn for 180,000 affordable homes is welcome, but the latter is not new money and only 32,000 of those homes will be social rented housing – a mere third of what is needed which is simply not enough when council waiting lists are predicted to almost double to 2.1 million by next year.
The Chancellor announced £5 billion to remove dangerous cladding from high rise buildings, partially funded by the Residential Property Developers Tax to be levied on developers with profits over £25 million at a rate of four per cent.
Business rate relief
To support local high streets, a new temporary business rates relief in England is being introduced for eligible retail, hospitality, and leisure properties for 2022-23. Over 90 per cent of those eligible businesses will receive at least 50 per cent off their business rates bills in 2022-23.
Some words from Michael Hughes NAEA Propertymark, Commercial Board Member:
“The commercial property market should welcome the Chancellor’s comments relating to business rates announced in today’s Autumn Budget.
Most retail, hospitality, and leisure businesses are still fighting hard to get back on an even keel following the COVID-19 pandemic and so the certainty of continued business rates relief for these sectors is a great help. This will aid those business owners and investors looking to prepare their properties for sale and give purchasers the confidence to progress with acquisitions.
The introduction of three yearly business rate revaluation in 2023 will help to flatten the peaks and troughs that the previous valuation time scale created.
The business rates exemptions for green property improvements will benefit and enhance the quality of business property stock at a time where the environmental benefits of a premises are seen as crucial to their sustainability by much of the financial industry.
Finding a way to taper the benefits of all these announcements following 2023 may be difficult, but the Chancellor has given us hope for the growth in the commercial property market with this budget.”
*content courtesy of propertymark*