We are now only days away from one of the most-anticipated events in UK politics; one which has a considerable impact on every single person and business in this country and which may be making many of us mortgage and property market stakeholders very nervous.
I don’t mean Boris Johnson’s latest meeting with a Foreign Minister of course, but the Autumn Statement which will be delivered by Chancellor, Phillip Hammond, on Wednesday.
There has been much speculation around the contents of the Autumn Statement, not least the supposed ‘clashes’ between the teams at Number 11 and Number 10 over what should be the focus of Hammond’s address.
We are led to believe that Theresa May has been pushing for an aggressive ‘JAM’ agenda which doesn’t mean the introduction of State support for those who like making a preserve or two, but instead its the ‘Just About Managing’ demographic – those people who are just about managing when it comes to meeting their financial commitments and getting through each month.
May, it appears, wants to move the economy and State intevention more in favour of this ‘silent majority’, rewarding those who were no doubt hit hard by half-a-decade of austerity.
Hammond, again from ‘sources’, appears in favour of playing to his core Conservative Party voting demographic, which may well play into the hands of those seeking a much greater focus on the property market, in particular those who invest in property, and the landlords who do a significant amount to meet the ‘housing gap’.
There appears to be no doubt that Hammond’s first and potentially last Autumn Statement will focus a lot on the provision of new housing.
It already seems that the previous iteration of this Government’s one million affordable home target by 2020 is going to be missed. Perhaps by a considerable amount, and Hammond will need to find a way to reinvigorate housebuilders of all shapes and sizes in order to get building quickly.
The anticipated £3 billion housing fund to help smaller builders will be most welcome if it reaches the parts other such incentives have not, especially given the fall-off in housing completions by SMEs since the Credit Crunch and subsequent recession.
As a former landlord himself, one suspects the importance of the buy-to-let/private rental sector will not be lost on Hammond, and it is his background in this market which is encouraging stakeholders to think there could be some major u-turns that frame the market back in favour of the buy-to-let brigade.
We are all aware of the measures that have been put in place which have/will hit landlords – increased stamp duty, cuts to mortgage interest tax relief, stricter lending criteria – and there is some hope that there could be announcements around the first two.
Will Hammond u-turn on increased stamp duty for additional properties? Will he call off the tax relief changes? One might anticipate, at best, some tweaks to be announced but, as I recently read, Hammond is not responsible for these ‘problems’ and therefore may not feel the need to to ‘fix them’.
One suspects that the overall policies will remain as is, but there could be a small amount of tinkering made as a sop to those who want to see the back of them.
Overall, one has to think that Hammond will focus on supply, supply, supply. This may not necessarily all be about owner-occupation either; there is a lot of noise around ‘Build to Rent’ as well as an anticipated policy that has people starting off as renters, and converting their rental payments into equity over a period of time.
Given the high prices in the marketplace, the difficulty in saving up for a deposit unless you have access to a ‘Bank of Mum and Dad’ and the stricter mortgage affordability criteria, you have to think that such a policy will go down well with millenials.
Finally, the next Autumn Statement will be a crucial step in terms of the UK economy’s ability to survive post-Brexit. By the time of the Budget in March, one would anticipate Article 50 will have either been invoked, or we will be close to it, and we will be embarking on a period of even greater uncertainty than we have now.
The lack of a detailed plan on this remains, and the country may well look to Hammond in order to give them plenty of reassurance that the outcome will not be as bad as previously painted, and we have a Government willing to support everyone during the time it takes us to leave the EU.
It’s a big ask, but at this time, Hammond must know that a nation expects.
*Rob Clifford is a CEO of CENTURY 21 UK, part of the SDL Group