Response to the Autumn Statement
Wed 25 Nov 2015
Peter Rollings, CEO of Marsh & Parsons, comments: "The London housing market is a law unto itself, and its encouraging to see the Government recognise the added affordability pressures at work in the capital, and tackle these with a designated London Help to Buy scheme. With rumours that interest rates might rise earlier than expected, this will inject renewed confidence and should help thousands of prospective homeowners realise their aspirations of getting on the property ladder."
"But the Government needs to be careful not to put all its eggs in the first-time buyer basket. Its narrow focus on frontloading people onto the property ladder, is causing a lot of drag in the rest of the market, and doing nothing to buoy up sinking supply. Last years Stamp Duty changes have marooned the top-end of the property market and Osborne has missed a trick by not acknowledging this."
"High-end sellers are having to cast off their prices to tempt buyers onboard, and this stagnation is trickling all the way down the chain creating a logjam that is disrupting the natural flow of the housing market. Homeowners are simply staying put, and the supply of homes for sale above 1m has been left high and dry as a result. The Treasury has a reduced Stamp Duty take as a result which theyre now trying to recoup from landlords with the newly announced higher Stamp Duty on buy-to-let property."
"This additional layer of taxation may deter one-off landlords, but is unlikely to put off the vast swathes of professional investors who enjoy good capital growth and promising yields. This new measure needs to be carefully monitored to ensure it doesnt have the unintended consequence of limiting lettings supply and therefore pushing up rents. Its also worth remembering that it doesnt make prices any more affordable for buyers it just penalises investors."