Amid the highest tax burden since the second world war and sky-high mortgage rates, the Chancellor Jeremy Hunt has delivered an Autumn Statement that seeks to put the UK economy “back on track.”
David Hannah, Group Chairman of Cornerstone Tax, the UK’s leading property tax advisory, discusses what today’s announcement means for prospective first-time buyers, tenants and landlords
David Hannah, Group Chairman of Cornerstone Tax said, “The Chancellor needed to use this opportunity to provide liquidity support to the construction industry to enable them to build speculatively and increase the housing stock more rapidly in this country.
“The decision to commit an additional £110m to deliver nutrient mitigation schemes to unlock 40,000 new homes in cities including London, Leeds and Cambridge is positive news. Earmarking £32m to address the planning backlog and beginning a consultation to allow any house to be converted into two flats marks an important step in freeing up the rental sector’s supply problem, potentially easing the strain felt by both landlords and tenants.
“At another level the crisis in the private rental sector, could have been eased by removing the second home surcharge from bona fide private rental sector investors giving them a reduction in their acquisition costs and also reinstating full relief for mortgage interest payments in common with other businesses that have to borrow money to provide their services.
“This double measure would have both reduced the costs of purchase, whilst allowing landlords to freeze, or even potentially cut, rents which have had to have both these penal measures “costed in” over the last few years. It would also stimulate purchases in the market at a time when owner occupiers are unable to purchase because of affordability issues.
“The above would have provided a robust solution to providing homes, stimulating the property market at the lower end and restoring what has been a politically motivated but economically disastrous strategy from a government that, as little as 14 years ago, was begging the private rental sector for help during the crash.”