Spring Budget 2020: Changes for homebuyers and renters in the UK

As well as changes to Stamp Duty, the following were discussed in yesterday’s Spring Budget announcement:

Government’s commitment to extend the Affordable Homes Programme

Tom Slingsby, chief executive of property developer Southern Grove, says: “This cash boost for affordable homes will underpin building for many years to come and is a declaration of war on a housing crisis that isn’t going away.

“Only sufficient provision of affordable homes in the right areas can prevent the sort of social inconsistencies that appear when high property prices put key areas of UK cities off-limits to younger workers and their families.

“We know from conversations we have constantly with housing associations that the appetite is there to keep building through economic cycles and this fund will ensure that will happen.”

Henry Verrill, Head of Valuations at estate agent Nested comments: “Today’s budget contains welcome announcements for the housing market. The interest rate cut, though principally in response to COVID-19, stands to benefit those on variable rate mortgages and buyers looking for fixed-rate deals.

“And the £12bn set aside for the affordable homes programme – combined with a further £1.1bn for the building of up to 170,000 new homes – is good news for those planning to take their first steps onto the housing ladder in a market where the cost and level of supply is a well-known issue.

“We’re particularly pleased to see £1bn designated to the new building safety fund – a fund which will help ensure the removal of unsafe cladding from apartment blocks.

“This continues to be an important issue for Nested’s clients and this measure will provide a degree of reassurance to buyers and sellers of flats across the country. Whilst it’s too early to tell whether the sums allocated will be enough, it’s certainly a step in the right direction.”

Renters’ Reform Bill

Neil Cobbold, Chief Sales Officer at PayProp, comments: “The lettings sector would have been relieved to hear further details of this legislation, along with a clearer timetable for property professionals to work to. 

“Removing Section 21 from the Housing Act 1988 is a huge change to the evictions process. It’s vital that input from the industry is considered when this measure is debated in Parliament in order to get the best outcome for all parties.

“Lettings professionals will also want to see how the court system will be reformed to oversee the new system.

“The introduction of lifetime deposits could have a range of advantages for the rental sector – and particularly for renters. However, it will be important for politicians to consider input from the sector when deciding how a new deposit system could work.”

Building Safety Fund to remove unsafe cladding from all UK buildings above 18m

David Westgate, Group Chief Executive at Andrews Property Group, comments: “The announcement of a £1bn Building Safety Fund will be welcomed by leaseholders living in high rise blocks around the UK.

“The key issue, as ever, is how quickly the funds can be called upon and if there are any specific criteria that must be met for developments to be eligible.

“The funds have officially been made available but the logistics have yet to emerge. In the meantime, many people’s lives have been put on hold as they cannot secure mortgage finance and they cannot sell their homes.

“What’s also vital is that the new fund covers rendered insulation as well as combustible cladding.

“In our experience, the cladding issues we are seeing around the UK could soon be surpassed by the problem of rendered insulation.“If we are to genuinely make every apartment and housing block in this country safe then the newly announced fund needs to cover all materials that are deemed to be unsafe, not just cladding.”

Lack of investment to help the issue of homelessness and boost homeownership

Jon Sparkes, chief executive of Crisis, said: “Missing from today’s Budget is bold action to prevent people from being forced on the streets in the first place, such as clear targets for increasing the supply of social housing and restoring housing benefit to cover the cost of rent.

“Rough sleeping is the most brutal and devastating form of homelessness and while the additional funding announced to tackle this is much needed, a dark cloud remains over the Government’s ability to end rough sleeping within this Parliament without tackling its root causes.  

“The lack of investment in housing benefit is a complete missed opportunity for the Chancellor to free some of the most vulnerable people from the grip of poverty. 

“The upcoming Spending Review must restore housing benefit to cover at least the lowest third of rents – the Government cannot continue to look the other way while people are forced into homelessness under the constant pressure of rising rents and low incomes.”  

In a joint statement, the Residential Landlords Association and the National Landlords Association said: “The Government is undermining its own efforts to boost homeownership through its attacks on the private rented sector. By choking-off supply and making renting more expensive it is tenants who are hardest hit. 

“Ministers need to wake up to the reality of the damage their tax measures are doing to the private rented sector and support landlords to provide the new homes for private rent we desperately need.”