The Autumn Statement - what it means for the housing market

23 November 2016

Savills comments on what the Autumn Statement means for the housing market

On the proposed ban on letting agents charging tenant fees in England, Lucian Cook, head of Savills UK residential research says:

“This measure will be widely welcomed by tenants but risks unintended consequences.

“We do not believe that landlords will be able simply to pass this additional cost on to tenants by way of rent. Instead we expect it to result in higher costs for landlords, in a sector already facing increased taxation and greater mortgage regulation. That is likely to curb private investor appetite for residential investment and limit the amount of new rental stock at a time of growing demand for rented homes.  This supply demand imbalance is expected to mean less choice for tenants and upward pressure on rents that plays out over a longer period.

“None of the measures aimed at buy to let investors will directly benefit aspiring first time buyers and second steppers who face very substantial difficulties in accumulating a sufficient deposit to get on the housing ladder. That means there is an increased need for more professionally managed rental stock to be provided and a pressing need to boost the institutional build to rent sector.

“Savills five year forecasts for transactions (issued early this month) anticipated a 25% fall in mortgaged buy to let transaction volumes by 2021.”

On housing delivery, Robert Grundy, Head of Housing, Savills, says:

“Today’s Autumn Statement emphasised that tackling housing is key to addressing some of the most pressing economic challenges ahead and recognised that grant funding is an essential part of housing delivery. 

“In a wider drive to increase national productivity, address imbalances across the country and prepare the economy for a potential slowdown ahead of Brexit, the Chancellor announced a series of measures aimed at increasing housebuilding and supporting the delivery of new housing across a wider range of tenures.

“The package announced today will step towards a better functioning housing market with support for a greater number of affordable homes. 

“The move marks a clear shift away from the previous Government’s focus on homeownership, The Chancellor of the Exchequer’s commitment to provide an additional £1.4bn of grant funding  to help support  40,000 new affordable homes, together with a more flexible use of existing funding for affordable housing, will enable the delivery of a wider variety of housing tenure aimed a different parts of the market.

“London, where affordability is most stretched, will benefit from £3.15bn of that package to deliver 90,000 affordable homes. This is key to providing enough homes for London’s workers which is essential to maintaining the capital’s competitiveness.

“The £2.3bn Housing Infrastructure Funding intended to unlock 100,000 new homes in high demand areas is likely to help housing providers make a step change in housing delivery.”

 

 
 

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Key Contacts

Sue Laming

Sue Laming

PR Director
Press Office

Savills Margaret Street

+44 (0) 20 7016 3802

 

Lucian Cook

Lucian Cook

Director
Residential Research

Savills Margaret Street

+44 (0) 20 7016 3837