Housebuilders and buyers united in opinions on policy

Listening to public opinion seems to in vogue in Westminster these days, and so WhatHouse? commissioned a survey of its audience to find out what aspects of housing and planning policy they would like the new government, led by Theresa May, to focus on.

Click below for an infographic of the results

Interestingly, the will of the house-buying public appears to be at one with the housebuilding industry.

A poll of more than 2,000 readers found that 61% of respondents want May to abolish Stamp Duty for first-time buyers.

“The strength of the public’s desire to abolish stamp duty resonates across the housing industry,” said Ray Withers, CEO of Property Frontiers. “With the UK in the grip of a decades-long housing shortage, the market needs all the help it can get to keep supplying homes at reasonable prices and many see stamp duty as a barrier to that due to the April 2016 increase for second homes.”

“It is not a surprise to see that 61% of those surveyed by WhatHouse? want to abolish stamp duty,” agreed Henry Smith, chief executive officer of Aitch Group. “The reforms that were introduced by George Osborne in December 2014 have slowed down the market and not raised anywhere near as much money as the Government predicted.

According to Smith, changing the tax to different percentage rates, which are applied to a portion of the price, has not worked – it has had a far larger and far more negative effect on the market than was first predicted.

“I believe it would be a mistake for the Government to not take action in the Autumn Statement next week,” said Smith. “The current set-up is having a detrimental impact on the housing market, especially for family homes in London and the Home Counties. We are in the middle of a housing shortage which requires investment, and this tax change is estimated to have already cost our economy nearly £1 billion due to the of a reduction in the number of people selling homes.

“The Government needs to encourage house building, not hinder it.”

However, market forces in the UK are changing significantly. A lack of rental properties pushed rents up 5.1% in the year to April 2016. “This means that the recent stamp duty increase on second homes is somewhat easier to bear from an industry perspective,” said Withers. “Most buy-to-let investors are looking to invest long-term. Even though their year one costs are higher as a result of additional stamp duty, they are insignificant when viewed over years or decades. Stamp duty is less of a barrier to investment in the UK housing market than the headlines might imply.

“It is perhaps fair to say that no tax is ever really popular, so from an industry perspective the public’s disillusion with stamp duty is entirely understandable. However, so is the government’s decision to take a slice of the action from the country’s booming buy-to-let sector. That might explain why 39% of respondents are not concerned about stamp duty – even in a year when its popularity has plummeted.”

Out of 2,000 respondents, the survey also revealed that:

• 46% want to restrict overseas purchasers to free up property for UK buyers;
• 25% want to allow local authorities to raise funds to build their own homes;
• 25% want to penalise developers for not building when they have planning permission;
• 22% want to simplify planning restrictions to make housebuilding easier and quicker;
• 22% want the government to stop selling off council houses through the Right to Buy scheme;
• 12% wanted more focus to be put on homes for retirees;
• 10% wanted green belt land to be allowed to be used for housebuilding;
• Nine per cent wanted to encourage more high-rise building to maximise land use;
• Seven per cent want to stop subsidising purchasers with Help to Buy.

“The survey identifies some key areas where Government can make a difference,” said Steve Turner of the House Builders Federation. “Whilst the planning system is producing more outline permissions, it is still taking far too long to process the applications to the point where builders can build them; and whilst the Help to Buy equity loan scheme continues to drive demand by enabling first time buyers to buy a new build home, more needs to be done to tackle the affordability issues faced by far too many people.”

Brian Berry, chief executive of the FMB, agrees with the 25% of readers who want local authorities to build their own homes. Although the new government has taken a step in the right direction, Berry believes more needs to be done.

“We want to see more local authorities allocating a higher proportion of smaller development sites, which would lead to more houses being built at a faster rate,” said Berry. “Another positive step would be for central Government to allow councils to borrow to build homes, something they are not currently able to do to any great extent. This would almost certainly increase the supply of housing in the country.”