30 October 2018

BLOG: Housing Crisis, What Housing Crisis?

By Scott Fulton | 30th October 2018

There was a lot to digest in The Chancellor’s 60-minute Budget speech yesterday, not least the impact on the high street, pot holes, “tech giants” and the tax treatment of public toilets.

But there is little to report on UK housing. Faced with choices on Help to Buy, planning and stamp duty, “Fiscal Phil” focused on other areas. Interestingly, the Leader of the Opposition did not challenge this omission.

Does this suggest that both sides of the political divide have tacitly agreed that there is no capital to be made in addressing this point? For now, this would appear to be the case.

Ahead of a thorough review of the “Red Book”, the current Help to Buy program remains largely unchanged. However, it was announced that, from 2021, the Help to Buy equity loan scheme will only be made available to first time buyers. There is no guarantee that Help to Buy, in any form, will persist beyond 2023.

On land, and aside from an oblique reference to The Letwin Report (whose detail was not available at the time of writing), there were no changes to the current planning regime aside from a recognition that “large house builders are not engaged in systematic land banking”.

Unlike the last several Budgets, there was no substantive change to stamp duty (SDLT).

Those following the listed house builders are now left with the forthcoming trading statements next month from Persimmon, Redrow, Taylor Wimpey and Bovis Homes in terms of assessing the prospective market.

Given the recent share price decline across this sector (see Crest of a Wave, 29th October 2018 ), there must be some relief that The Budget did not change the status quo but the lack of visibility in the long-term future of Help to Buy may temper the immediate reaction.