The latest measures for property the Chancellor included in his Autumn Statement may not have been dramatic, but has it given the industry the time it needs to collect its thoughts and plan for a new era? Despite commentary and criticism, property law expert, Paul Sams, is optimistic….
So now the dust has settled from the ‘Autumn Statement’ (can’t we just call it a Budget?) what can we say about its impact on the property market?
I have to confess that while Jeremy Hunt was making his pitch in the House of Commons on Stamp Duty measures, I was taking my own holiday and gamble across the Atlantic in the ‘City of Lights’. Though I like to think we both played our part in strengthening the pound against the dollar, in truth I fear our respective actions had similar impact – not a lot.
As we saw from 2020 to September 2021, ‘Stamp Duty Holidays’ are far from relaxing, but at least this measure has provided stability for the next couple of years - we know what to expect and can prepare, so that is no bad thing.
However, what people tend to overlook is that in the last Stamp Duty Holiday, moving house was the only thing people stuck at home without access to holidays or leisure activities could do (and as lockdowns went on, the chance to move became more and more attractive.) There may be a bit of a rush come March 2025 to get some matters completed, but I do not see this having a major effect.
The other big announcement in the Statement for property concerned changes to Capital Gains Tax. Are these measures going to make landlords sell up now to avoid having to pay more tax at a later date? Probably not.
It will disproportionately effect landlords who hold lower value properties, but CGT rates have never been in line with those of Income Tax. However, we should bear in mind that one in five UK homes is rented, so despite the best efforts of some organisations to demonise landlords, they are needed.
Interest rates are of course likely to go up, but it is worth noting the ‘gilt market gazers’ have now predicted rates will peak at 3.75%, not the original 4.25% they suggested after September’s ‘Mini-Budget’ fiasco. Once again, it gives the opportunity to plan because rates would have inevitably risen to this level had it not been for the pandemic, just at a slower pace and felt less. The reality is that rates were too low for too long and we all became too complacent.
The property industry needs to admit it has had a good run in recent years, but dwindling resources means there is only so much a government can do. The fact that opposition parties have said so little on the subject can be seen as tacit support.
So my take on the Autumn Statement is that it could have been worse. A lot worse. When you are in a hole like the world’s economy is for numerous reasons, rather than dig down, you need to claw your way up and out with positivity and opportunity.
This is all provided we can resist the urge for an election, referendum or some other political event to “spice things up”, but that’s a whole other article.
*Paul Sams is Head of Property at Dutton Gregory Solicitors