The new Chancellor announced his “first and last Autumn Statement” at the end of last year and following the Spring Budget in March 2017, further budget announcements will be delivered in the autumn. So, what could be on the cards for next week’s announcement?
Last year’s Budget, delivered by then-Chancellor, George Osbourne, seems like a lifetime ago. Since then, we’ve had an all-important referendum to decide whether or not Britain is to leave the European Union and in an historic turn of events, the vote was cast to become an independent nation.
Following that decision, the Government went through a complete changeover. With a new Prime Minister at the helm, a new cabinet will be leading us forward through the Brexit process. No wonder all eyes were on the new Chancellor, Rt Hon Philip Hammond, as he delivered the Autumn Statement last November. And whilst he was certainly able to deliver a plan of his own he left one final surprise at the very end. It was then he announced that it was to be his “first and last” Autumn Statement and that there would be some new changes to budget announcements going forward.
With all of those adjustments happening in less than 12 months, it makes last year’s budget announcements seem small-time. But, no doubt there will still be some common themes as expected; a focus on housing, improving education and plans for a budget surplus, for example. But, even though the aim of cutting the deficit was high on previous agendas, at last year’s Autumn Statement, Philip Hammond announced that he was instead planning to re-invest some of that cash into infrastructure and housing which could ultimately delay the original deficit targets.
As members of the property industry we were keen to listen out for the Government’s plans to tackle the housing shortage. Perhaps laws could be changed to allow some unused commercial property to be converted to residential, or even if the decisions relating to increased Stamp Duty Land Tax (SDLT) for second homeowners could be reversed, that would be a good start
What was delivered in the Autumn Statement included plans to allocate £2.3 billion of funding to open up sites for more than 100,000 homes, a £1.4 billion fund for 40,000 affordable homes and a relaxation of restrictions on government grants to aid further building of property. For housing association tenants, the Government announced plans to pilot a help to buy scheme and for all renters, any fees associated with renting a property from an estate agent will be banned.
There have also been a number of measures introduced aimed directly at landlords and property investors. They face the loss of mortgage rate relief on their buy to lets, which will mean squeezed profits for many – even negative profit margins for some. Time will tell if this leads to a further shortage of investment in property, although while this was forecast for residential property with the hikes in SDLT, so far the British property market has weathered the storm.
Speaking of SDLT, there were some changes announced at last year’s Budget relating to commercial property to allow for a fairer calculation of tax according to property size. It meant that buyers of commercial property worth up to £1.05m will pay less than previously – so for a lot of small businesses that fell into this category, the tax bill could now be significantly less.
No doubt, there will be a number of wants and needs from the world of property as we look towards next week’s Budget – let’s hope there will be a little light reprieve.