PHPD collects reactions from across the industry to Chancellor Jeremy Hunt’s Autumn Statement on 17th November. This post may be updated as more responses come in.
Click here for a brief summary of the statement by the BBC.
Jatin Ondhia, CEO of Shojin, said: “Sunak and Hunt have been caught between a rock and a hard place. The pressure of plugging a £55bn fiscal hole has led to a Dickensian Autumn Statement, which left little room for any rabbits to be pulled out of the hat. While the main focus of these austerity measures is to attempt to patch up the country’s finances without rattling the markets, the giant elephant in the room is that the housing crisis is deepening.
“The affordability, quality and volume of homes is worsening for residents, as the upwards pressure on rent is being exacerbated by rising demand and a dwindling supply of homes. This is a national issue and one that can only be solved by taking decisive action to support housing development and boost the delivery of new homes. With housing representing the highest living cost for most, we cannot afford for this ongoing crisis to be once again swept under the carpet in the face of mounting fiscal pressures.”
Paresh Raja, CEO of MFS, said: “With a £55bn fiscal black hole to fill, Hunt’s task today was far from easy. Admittedly, the austerity measures announced in the Autumn Statement will contribute to reducing the deficit. However, the announcement will do little to settle the nerves of those in the buy-to-let sector.
“In the midst of rising interest rates and the aftermath of the mini-budget, buy-to-let landlords are seeing the value of their assets decline, while the cost of borrowing and property maintenance continues to rise. These issues have not been addressed today and are harming the viability of owning a buy-to-let property, which is forcing many landlords to consider selling their properties
“In fact, according to MFS’ research, 40% of landlords are now planning on selling one or more of their properties in the next 12 months; such an exodus from the market would present an apocalyptic challenge to an extremely competitive private rental sector that is already grappling with rampant demand and a perennial undersupply of homes. Make no mistake, if the Government fails to support buy-to-let landlords in the months to come, such a situation would be catastrophic for renters.”
Adam O’Brien, Managing Director of Hampshire-based housebuilder Metis Homes, said: “Given the UK economy is heading for recession, I wasn’t expecting the new Chancellor to deliver a giveaway Autumn Statement, but I am underwhelmed nonetheless. There was no mention of a tangible focus on planning reform, without which there is zero chance of hitting the government’s own housing targets. Without a solid housing market, the economy will continue to suffer.
“The government must give us the ability to obtain planning permissions for well-conceived schemes in a timely fashion. We need a realistic chance of building efficient houses without having to mitigate obscure environmental issues like phosphate, nitrate, and water neutrality, that arrive without warning and come with impossible parameters to grapple with. Some much-needed streamlining will mean more houses get built, which will in the long term make them more affordable.
“In the meantime, a scheme to help people get on the ladder to buy new homes – which are inevitably more energy efficient – may be key. Help to Buy had its critics, but the long-running scheme undeniably helped to strengthen the market and facilitate more home ownership. Is it wise to remove this altogether without some sort of replacement stimulus, at a time when affordability is more challenging than ever?
“Fundamentally, where is the tangible support for the new homes industry, behind all the recent rhetoric about making planning and housebuilding “easier”, “less ugly” and “levelling up”? We have a planning system on its knees and growing regulation – particularly from Natural England – is keeping it down. Local authority planning departments need to become an inviting and lucrative place where people want to work. It’s a cultural shift that’s needed and this cannot happen without funding. Below-inflation pay rises are not going to help to achieve this.”
Mike Burton, Land Director for Metis Homes, said: “Public sector funding not tracking inflation will lead to a real terms reduction in the funding of planning departments, compounding the resourcing issues that they already face, which is one of the key problems with the planning system. It will also likely lead to public sector pay not tracking inflation, further reducing the pay of planning and development management teams, and restricting their homebuying purchasing power. It sets a tone for the wider employer base as well. If businesses follow suit and increase salaries at a below inflation amount, the net position will be a population with less buying power and therefore a lower level of affordability for house purchases.
“Meanwhile, not raising income tax thresholds and lowering the top level will affect affordability and buying power for the whole working population. More people will be dragged into higher tax brackets, which will result in less net income in real terms, negatively impacting the ability to secure and pay down an affordable mortgage.
“Raising corporation tax to 25% will impact SME housebuilders, who often live hand to mouth and cannot weather increased tax costs in a period of choppy waters. We face an uncertain economic outlook, numerous pressures on profitability – including the prospect of decreasing house prices and increasing costs, plus significant delays, due to public sector inefficiency – meaning that we must look to protect what is left. An increase in taxes feels materially imbalanced and removes the incentive for SME businesses to be entrepreneurial.
“The announcement that the £425,000 Stamp Duty threshold for first time buyers is now temporary until March 2025 is a further retrenchment from the previous administration’s Mini Budget. Whilst it may in the short term provide some motivation for people to buy and not sit tight, it is unlikely to materially stimulate the market in the way that changes to Stamp Duty thresholds did during the Covid-19 pandemic. What it does do is make it more challenging to forecast business performance beyond the Stamp Duty period changing – another nuance that SME housebuilders will have to now change their plans for.”
Mark White, Managing Director for Hampshire-based premium housebuilder Bargate Homes, said: “While I acknowledge the new Chancellor’s £55bn plan to rebuild public finances, I am struggling to see how Hunt can pledge to prioritise growth, stability, and public service, with this raft of tax rises and below-inflation – or delayed – spending proposals.
“Customers buying our family homes – which average £450,000 – need certainty to make the move to a new home that suits their needs. And the bottom of the chain needs to feel confident making their first step onto the ladder. The first time buyer Stamp Duty exemption of up to £425,000 – only introduced in September – is a help, so it is bitterly disappointing to hear that it will revert to £250,000 in 2025.
“The energy price cap will increase to £3,000 for the average family home for 12 months from April. But when lowering our carbon footprint and reducing energy consumption is so critical, why is more not being done to fix the planning system, solve the prolonged phosphates, nitrates, and nutrient neutrality issue, and stimulate the new homes market? For the best part of a decade, 30-40% of our sales were via Help to Buy. It enabled hardworking people to stetch their affordability further and buy the new home of their dreams. Designed to replace it, the HBF’s Deposit Unlock scheme has not had the market traction that is needed to help our potential customers. It needs more government intervention to give it the boost it deserves.
“Looking towards a 2023 Spring Statement, Jeremy Hunt should consider subsidising Green Mortgages, so that monthly repayments for the most energy-efficient new homes become significantly cheaper. The Feed-in Tariff for household renewable energy generation should also be reintroduced, to make living in a home with solar panels much more financially rewarding.
“We are on site at six developments across Hampshire, which are delivering over 900 open market and affordable family homes. We have 500 tradespeople working for us, and with the impact of planning and nutrient neutrality issues, Brexit, the prolonged unrest in Ukraine, soaring energy costs, and inflation, it costs £20,000 more to build a typical three-bedroom Bargate home than it did only five years ago. It is no wonder the industry has totally lost pace with the 300,000 new homes per annum, and this budget delivers nothing to stimulate growth.”
Bargate Homes is a wholly owned subsidiary of Vivid – Hampshire’s largest provider of affordable homes. Established in 2006, the company delivers select developments in prime locations across Hampshire, Dorset, and West Sussex. The company is currently delivering 900 homes across six live developments and has a pipeline of future sites expected to deliver in excess of 2,500 new homes.
