We are now less than a month away from Philip Hammond’s first Autumn Statement to the nation, depending of course on whether Hammond himself makes it that far.
Recent speculation in the press suggests our new Chancellor has not been too enamoured about being ‘left out’ of some important Brexit-related meetings and that he’s actually threatened to resign twice already unhappy at the strategy that’s being adopted by Number 10.
First of all, I might suggest that if Hammond has detected a Brexit strategy at all, then he’s one step above the rest of us, but certainly it’s rather worrying that there are already rumours of the new ‘steady as she goes’ Government breaking apart.
I think we all acknowledge these are unprecedented times in many circles however it has not been a good month or so for the Conservative Party in trying to outline just what is going to happen in the lead up to, and beyond, the Brexit negotiations.
For the housing market, the continued uncertainty is not helpful given we are already seeing residential transaction levels in subdued mood. While there was a slight increase in August, from July, up to 109,630 compared to 107,620, it’s very difficult to say with any confidence how the rest of the year might pan out.
Comparisons with 2015 do not appear viable given what has happened politically this year, and the economic impact the EU referendum has already had – plus of course we were not in a post-stamp duty increase period last year and in terms of buy-to-let transactions, we have undoubtedly seen a big dip since March.
Which leads us back again to the Autumn Statement, and perhaps regardless of which Chancellor rises to deliver it on the 23rd November, we believe the market is crying out for some positive action.
Ironically, this positivity can be delivered by dropping the stamp duty increases for additional properties, and if the Government are looking to deliver a real boost then they could also scrap the changes to mortgage interest tax relief for landlords, due to be introduced in April.
As agents following the situation, you would hopefully have seen the CA’s public calls for this, and we are not alone here. Indeed, as the Autumn Statement draws nearer, more and more housing/mortgage market stakeholders appear to be coming out and saying the same thing.
You could perhaps answer this question best, but if George Osborne’s measures were designed to level the playing field between landlords and first-time buyers, have they achieved their aim? Have you seen a drop in landlord activity made up for by a corresponding increase in first-time buyers?
My own perception is that this hasn’t been the case, and that’s because the fundamental problems for first-time buyers to overcome will not be addressed by these measures. Saving for a deposit remains the number one issue, closely followed by access to low-deposit mortgages. Has this improved because of the stamp duty changes? It would appear not. It’s why we’re looking for the Chancellor to draw a line under the mistakes of his predecessor and recognise the boost to activity and confidence scrapping these measures would provide.
Add in the anticipated boost to house building that has already been partly announced and there is the potential here to provide the housing market with a kick-started beginning to 2017.
Do I genuinely think this is going to happen? Perhaps not but then, politically at least, we’ve often seen ‘new’ regimes roll back the work of those that have previously walked in their shoes.
Certainly, both Theresa May and Hammond do not appear to be the greatest fans of Osborne and I suspect there would be no qualms about unstitching his efforts in this area.
At the moment we are playing the waiting game, on so many levels, but to my mind this would seem the perfect point to reflect on those changes and make a decision based on what they have (or rather haven’t) achieved.
Let’s not worry too much about holding onto something just because it’s a relatively recent introduction to the market – or in the case of tax relief not even in place yet – let’s make sure we give the market the very best opportunity to function effectively without needlessly throwing out the buy-to-let landlord with the bath water.
*Eddie Goldsmith is Chairman of the Conveyancing Association and Partner in Goldsmith Williams