Chancellor Rishi Sunak unveiled his budget this afternoon, which included investments in wasteland housing projects, the removal of coatings from high-risk buildings and hopes that unemployment will peak at 5.2%.
John Phillips, national director of operations at Just Mortgages, said the budget was tight for real estate players, as expected.
He said, however, that there was positive news with significant funds allocated to building new homes on brownfield sites, but he doesn’t expect the benefits of that to be felt for years to come.
Budget 2021: unemployment is expected to peak at 5.2%
Andrew Asaam, director of mortgages at Lloyds Banking Group, said setting up a fund to build new houses on brownfields is a welcome step to help alleviate the continuing housing shortage across the UK and reallocate available land.
“We look forward to supporting this important initiative as we provide essential loans to home builders, first time buyers, movers and private owners,” he added.
Phillips said that while some may have called for a stamp duty review, the lack of action is actually a positive for the market.
He added: “Last year transactions were artificially inflated by tax savings and the pandemic, and since the return of the stamp duty the urgency has diminished, but the demand has remained.”
Steve Seal, managing director of Bluestone Mortgages, said the Chancellor’s pledge to invest in the housing market is good news for all, but he believes it needs to be backed by a realistic and credible plan to meet the need. housing review.
Seal believes that further government investments to build affordable housing will help the younger generation and low-income families locked in rental cycles take their first steps on the home ownership ladder.
He added: “The Â£ 5bn fund to remove hazardous coatings will help prevent homeowners from becoming prisoners, but speed is essential and we need to see the government deliver on those promises quickly.”
Jeremy Raj, National Head of Residential Real Estate at Irwin Mitchell, said: âAs feared, the government has now confirmed its intention to point the finger at a select group of developers, to tax them, in a way that does not not solve the problem or change behavior, then tiptoe away from the coatings scandal.
Raj said he doesn’t think it’s clear whether the tax will actually serve as additional funds to address the problem, or in fact help those who are currently trapped in unsafe or unsaleable homes.
As a result, he believes that all interested parties should work together to ensure that: “the heat is not turned away with regard to the provision of funds for repair works, the considerable improvement of the regulatory framework , planning and construction and the detection of the real culprits do not go unpunished.
On the affordable housing investments revealed in the budget, Nitesh Patel, strategic economist at the Yorkshire Building Society, welcomes the Chancellor’s announcement that the government will invest Â£ 11.5 billion in construction of 180,000 housing units on brownfields.
However, Patel said Rishi Sunak could have further increased the number of properties available in the existing building stock through the reform of stamp duties.
He said: ‘We estimate that 50% of all residential purchases fall below the Â£ 250,000 threshold, which is only around 10% of total residential stamp duty revenue.
âRemoving the lower threshold would make it easier for homeowners at the bottom of the ladder to move to a larger home and increase the supply of existing homes available to first-time buyers. “