The need to improve economic growth is probably even more important now than it was at the time of last November’s Budget, explains a leading agent.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, previews today’s Spring Statement, to be delivered by Chancellor Rachel Reeves this afternoon.
Today’s statement has been downplayed by the government, but Leaf believes it still presents an opportunity to boost prospects for property investment.
“There’s no major Spring fiscal event now so thankfully there has been less speculation about tax rises and spending cuts which proved so damaging to the housing market a few months ago” he says.
“Uncertainty is the energy of investment. Fear or prospect of changes in interest rates, employment, taxes etc rather than actual change – as well as affordability – drives home buying activity and is crucial to economic growth.
“However, in our view, further encouragement is still required for first-time buyers who are the engine room of the housing market, helping to unlock transactions further up chains, maintaining liquidity and often taking up the slack of properties formerly owned by buy-to-let landlords.
“More new housing and an increase in transactions are not only good for the property industry as well as job and social mobility but keep prices in check and reduce the need for temporary accommodation.”
But Leaf maintains that for the housing crisis to be tackled, more needs to be done than simply announcing planning reform or setting high building targets.
“The widening gap between [planning] consents and delivery is no real surprise” he insists.
“The government cannot dictate where and how much to build but could make it easier to obtain planning for more safe and energy-efficient affordable homes on publicly-owned land.
“Better use of existing resources e.g. refurbishment, conversion of un- and under-used land and buildings, including empties, is also essential.
“Little demand means reduced or no supply but building homes is not currently financially viable in many areas.
“Governments do not often appreciate the time and money disconnect so many schemes are delayed or not built at all if, for instance, funding is lost.”
And the former RICS chief says last week’s shock announcement by the John Lewis Partnership that it was quitting the Build To Rent sector – where it had plans to be a major player in both constructing and managing schemes – should be a wake up call for politicians.
“In light of the exit by John Lewis from Build to Rent, the government may want to consider relaxing taxation rules in the sector to support specialist providers and their investors in this vital area.
“The most important question for the Spring statement probably is: what will be the impact of any measures on market activity as well as the consequences for the wider economy? Our plea to government is: please don’t choke off recent increases in home buyer and seller confidence.”
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