In his Budget Chancellor Philip Hammond has abolished stamp duty for most first-time buyers and promised £1.5bn to “address concerns” about the flagship universal credit scheme
The change, effective immediately, will mean those buying properties worth up to £300,000 – or up to £500,000 in more expensive areas – will save £5,000.
Hammond also unveiled lower growth forecasts and said that UK productivity remains “stubbornly flat”.
The government will also set aside £3bn for Brexit preparations, spend an extra £2.8bn on the NHS in England up to 2022 and freeze most alcohol duties.
Opening his statement, the chancellor said the UK economy “continues to confound those who talk it down” and updated MPs on the latest figures.
The Office for Budget Responsibility’s prediction of 1.5% growth for 2017 is lower than the 2% forecast in March’s Budget. However, it predicts borrowing to be lower than it did in March, at £49.9bn.
Other announcements included:
- £44bn investment as part of the government’s drive to deliver 300,000 new homes a year
- Freezing alcohol duty apart from an increase in duty on high-strength white ciders
- A promise to fund a pay rise for nurses if one is recommended by an independent panel
- Refunds on VAT for Scottish emergency services
- £28m for Kensington and Chelsea council for counselling and regeneration in the aftermath of the Grenfell Tower fire
- Spending £28m on homelessness projects in Manchester, West Midlands and Liverpool and aiming to eliminate rough sleeping by 2027
- Extra cash to boost the numbers of students taking maths after the age of 16
- Support for electric cars including a £400m charging infrastructure fund
- £300m to connect HS2 with rail improvements in the North of England
- A new railcard offering discounts to those aged between 26 and 30.
Hammond said the stamp duty cut would benefit 95% of first-time buyers. People buying in high-value areas will not pay the tax on the first £300,000 of properties worth up to £500,000, he added.
He said successive governments had failed on housing, and promised the “next generation” that getting on the housing ladder would not be just a “dream”.
Commenting on Hammond’s Budget announcement Paresh Raja, CEO of bridging specialist MFS, said:
“After an underwhelming Spring Budget that completely overlooked the property market, this time around the Chancellor has at least announced some reforms that will benefit homebuyers. While stamp duty has been cut for first-time homebuyers, the amount of money this will save prospective buyers is in reality still limited – the average first-time buyer spends £200,000 on a property; abolishing stamp duty for them will save them just £1,500.
“Importantly, homeowners looking to upgrade to another property still face the heavy financial burden of stamp duty, which will ultimately deter them from moving house. I fear this will have significant implications in the longer term, decreasing the number of people moving from their first property purchase, and thereby reducing the number of properties available for first-time homebuyers, and reducing movement in the market as a whole.”
Fareed Nabir, CEO and founder of online lettings app LetBritain, added:
“Having acknowledged the growing number of Brits stuck in rental accommodation, it’s pleasing to see the Government deliver a Budget heavily geared towards the lettings market. With 7.2 million households likely to be in the rental market by 2025, the Chancellor has seized the opportunity to continue with the recent wave of reforms by offering tax incentives for landlords guaranteeing tenancies of at least 12 months. This should hopefully have a trickle-down effect on rental prices, offering more financial manoeuvrability for tenants saving to buy their own house – something the Chancellor has made easier – while also providing additional security for renters.”
Andy Goddard, Principal at Ramboll Environ, says:
“The Chancellor’s commitment to an additional £44bn for housing through capital funding, loans and guarantees, as well as its pledge to more than double the housing infrastructure fund with an extra £2.7bn, is welcome news.
“We hope to also see in due course a commitment to brownfield development as part of an integrated sustainability approach. This can help urban planning to not only create new liveable communities, but also provide a net environmental benefit through land regeneration, biodiversity and resource management. Such forward-planning should be an integral part of the government’s plan for our housing future.”
“We are extremely encouraged by the latest plans set out by Philip Hammond. Large house builders have held the majority of the power for too long and it is great to see investment to support small to medium-sized firms that fight daily to overcome bureaucracy.
“The UK hasn’t built more than 250,000 homes in one year in decades. At that time, SME builders accounted for three-fifths of all new homes – now it is less than a fifth. With a lack of adequate land, small-medium builders – vital to spur competition – are nearly always pushed out by the big boys.
“The construction industry has been lacking confidence, and we hope that this is the first of many steps towards solving the housing crisis and ultimately, a better Britain.”