Philip Hammond, the UK chancellor, admitted that there is no silver bullet to solve the housing crisis, but abolishing stamp duty land tax for first-time buyers was a step that many felt was overdue.
Under the new rules, first-time buyers will not have to pay stamp duty on any property up to £300,000. And as a gesture to help buyers in high-price areas, the first £300,000 of any property valued up to £500,000 will also be exempt. Previously, stamp duty kicked in at £125,000, which means that instead of paying £5,000 on a £300,000 property, the new charge will be zero. If you’re a first-time buyer looking to buy a property costing more than £500,000, the new relief doesn’t apply, and rate of stamp duty up to £925,000 remains at 5 per cent. In reality, 95 per cent of first-time buyers who pay stamp duty will benefit.
For major housebuilders, the latest move will serve to increase demand for new homes and underpin prices, although of greater concern is the plan to initiate an urgent review to be implemented by the Spring budget statement on the number of consented plots that are not being built on, estimated to be around 270,000 alone. However, local authorities can already use completion notices which give them the right to determine when a development must be completed.
But, as Ian Anderson of real-estate services group Cushman & Wakefield pointed out, 30 per cent of the country does not have a 'local plan' on the number of houses to be built. "The government must be willing to step in and intervene directly in local authorities who drag their heels on getting a local plan in place," he said. "However, local authority planning departments are also hopelessly under-resourced and the government said nothing today about ensuring there are enough planners to deliver permissions more quickly.”
Once again, the government has pledged its target of 300,000 net additional homes being built each year, and a series of measures totalling £44bn will be introduced over the next five years to help speed up the building process, and also to encourage smaller housebuilders. What it failed to address was the possibility of increasing supply through modular housing. These are a long way down the line from their predecessor, the old pre-fabs built after the war, but there has been no financial incentive to accelerate output.
