‘A safe pair of hands?’ – property industry reacts to new Chancellor

New Chancellor Jeremy Hunt has been described as a safe pair of hands who could limit the extent of a housing market downturn after he controversially replaced the sacked Kwasi Kwarteng last week.

In a dramatic, fast-moving Friday, Kwarteng was sacked just weeks after his tumultuous mini-Budget, while Prime Minister Liz Truss reversed the planned cut to corporation tax.

She made no mention of changes to the Stamp Duty cut that was announced at the mini-Budget, suggesting that this cut will remain in place.

Kwarteng was swiftly replaced by former Health Secretary and two-time party leadership candidate Hunt, who has pledged to review the contentious mini-Budget.

Adrian Anderson, director of property finance specialists Anderson Harris, described Hunt as an experienced politician. 

Anderson said: “He is likely to be seen as a safe pair of hands that can help to restore confidence and calm volatile markets. 

“A reversal of the proposed tax cuts could take the edge off inflation and slow down some of the pressure we are seeing on rates for fixed mortgages.” 

Lawrence Bowles, director of research at Savills, was also positive off the back of the news and suggested the market could see more affordable mortgages return.

He added: “Already we have seen long-term gilt yields fall on the back of rumours that the government will be backing down on some of Kwarteng’s unfunded tax cuts – and confirmation, as well as news of his dismissal as Chancellor, should help to push yields down further, allowing the Bank of England to slow its pace of monetary tightening and easing pressure on mortgage costs. 

“With more breathing room, lenders should feel the confidence to put more products back out to the market.

“As a result, we believe that some of the existing downward pressure on house prices and transactions will be tempered. That said, the market will still need to adjust to the current higher interest rate environment, though perhaps not at such an amplified level.”

Hunt is no stranger to the property market and has his own portfolio of rentals.

The House of Commons register of interests shows he owns a half-share of a holiday house in Italy.

He also owns seven apartments in Southampton through Mare Pond Properties, a property holding company jointly owned with his wife.

Hunt was investigated by the Parliamentary watchdog in 2018 and later apologised for failing to declare his interest in the properties immediately.