Budget 2018: What can we expect?

October 26th, 2018

With the 2018 Autumn Budget just around the corner what could the Chancellor do to help build more homes and get people on the ladder? Our Managing Director Hiten Ganatra gives his thoughts.

The Government’s focus will understandably be on Brexit. I suspect we will hear more talk of preparation for ‘no deal’ and perhaps more clarity on the ‘Brexit dividend.’

There are also big political debates going on such as on NHS funding and Universal Credit that may dominate the newspaper columns next week. So I am not expecting huge announcements related to housing or lending but I have a wish list none the less.

  1. Stamp duty reduction…again: In his last budget Phillip Hammond scrapped Stamp duty for first-time buyers buying a home of up to £300,000. Some now want to see the Chancellor go further, perhaps lower the percentage or cap it to make it fairer across the country. Something I could certainly support.
  2. Extend Help to Buy: This is something I have been calling for. Help to Buy has been hugely successful in achieving its objectives of getting builders building and first time buyers buying. It is not without its critics and one school of thought says scrap it. However, I think it would be a huge challenge to the sector if Help to Buy was withdrawn, not least for the government who have billions of equity across the country. Personally, I believe extending it out to second homes would balance the market more evenly and would likely iron out the negative equity challenges that has hit some areas.
  3. Capital gains tax relief for landlords: Could it be that after years of looking at landlords as easy targets the government will finally offer an olive branch? Maybe. There are rumours that landlords could receive capital gains tax relief if they sell a rental property to a sitting tenant who has lived in the property for at least three years. An interesting policy, though I can’t see it having widespread use.
  4. Social Housing Comeback. Over the last month the Prime Minister has already set out plans to lift councils’ borrowing cap, the Social Housing Green Paper and the recent £2bn of extra funding for housing associations. I expect to see more detail as to how those announcements will be implemented with Councils specifically calling for the borrowing cap to be removed ASAP. This is a much more pragmatic view on social housing and the changes will make a real difference to the amount of social homes built by councils and housing associations. The sector is a vital part of the market and it is vital local authorities play their part.