When it comes to politics and regulations and their influence on the overall economy and property market, the devil is, as per usual, in the detail.
Whilst we are not trying to cover every comment, bulletpoint or improvement Mr Hammond has made in his first statement, one week on we wanted to have a closer look at what all of this means for the country’s property market.
London’s new housing fund
Housing and London have always had a very impressive “love hate relationship”. Wages across the City vary so widely and property is in such great demand that the Government’s announcement to put aside £3.15bn to build 90,000 new homes in London has been greatly celebrated.
Although it will take some time to actually feel the benefit, ultimately rents will drop below market value.
Affordable homes investment
Although the term “affordable homes” is often used in a rather wafty, undefined way, the £1.4bn the current Government set aside to support this stream of property have overall been well received.
This investment is expected to fund about 40,000 “affordable homes”. What this entails in more detail is, however, still rather unclear.
Letting agent fees
The announcement of a ban of letting agent fees across England and Wales has probably been one of the biggest headlines of this year’s Autumn Statement.
The suspicion that letting agencies have been charging double by asking the tenant as well as the landlord to pay certain fees, isn’t new to the market. Although the ban is currently under consideration it’s worthwhile knowing that Scotland has banned the fees in 2012 and has experienced no impact on rental figures.
No property tax reductions
Over the last couple of years, the British Government has slowly but surely increased the costs of investing in property. Whilst forecasts give grim pictures for a future in which property investment will be under constant attack (i.e. a potential £10bn shortfall in London’s property market due to a stamp duty rise), for now the Government seems unwilling to change its agenda.
Whilst all of the above reads reasonable, the details (and time) are really the only indicators able to tell us whether Philip Hammond’s decisions will actually improve the country’s property market. The numbers work on paper, but whether they will work in real life and whether the Government actually manages to hit its targets remains to be seen.