Autumn Statement - what did our panel of property experts make of it?

The property sector braced itself for the chill wind of Chancellor Jeremy Hunt’s Autumn Statement this week.

His pre-Budget comment that he had some ‘eye-wateringly tough’ decisions to make proved to be all too true as he raised taxes to record levels and squeezed public spending in an effort to repair the nation’s fractured finances.

And the measures he believed necessary to bring down inflation and keep mortgage rates stable while raising the revenue needed to fill the £55 billion hole in the economy were broadly welcomed in the hope that any recession will be short-lived and shallow.

Angels Media founder and CEO, Nat Daniels, said: “The immediate short-term is going to be difficult and things will probably get tougher. But the majority of people in the industry are in a position to weather the storm and come out stronger on the other side.

“The shorter the recession can be, the shallower it can be, the quicker we can recover. The industry has to prepare itself for a cold winter but beyond that, there are better times ahead once conditions improve. Underlying demand for homes is still strong.”

And Neil Cobbold, Managing Director, PayProp UK welcomed the government’s approach.

But he added: “Some of the measures outlined in the Autumn Statement will have an added impact on the Private Rental Sector (PRS) – most notably those that could lead to a reduction in the number of properties available for rent, and therefore, their affordability for tenants.

“A reduced threshold for higher earners could see more landlords being dragged into the 45% rate. In addition, the annual exempt amount for capital gains tax will be cut from £12,300 to £6,000 next year. As a result, some landlords may be looking at reducing their portfolios to reduce the tax bill from any property sale before the new threshold takes effect.

“Landlords that hold their properties within companies will also be looking at the impact of the reduced dividend allowance, which will be cut from £2,000 to £1,000 next year and then to £500 from April 2024.”

As far as tenants are concerned, Cobbold said the forecast of increased unemployment

“will undoubtedly impact some tenants as redundancies are put into effect across the economy. It is essential that the government collaborate with companies, tenant bodies and landlord representatives to ensure the PRS works for all.”

Embrace innovation

Director of online valuation specialists The ValPal Network, Craig Vile, said that measures to combat the cost-of-living crisis were inevitable.

“People will definitely feel the squeeze in the short-term, but there will still be business to be won. People will always want to buy homes.

“The key thing is for agents to work smarter to maintain their market share. Here at The ValPal Network, we encourage agents to embrace innovation and technology to improve their business and stay ahead of the competition. Lead management and nurturing is going to be more vital than ever in the coming months if transactions begin to ease. The successful agents will be ones who recognise how to turn those leads into new business. And they must not cut back on their marketing spend. That is essential when times get tough.”

Daniel Evans, Chair of the Association of Independent Inventory Clerks, said Hunt’s budget will have done little to stop the exodus of landlords from the PRS.

“The market has been really buoyant over the summer and the question now is, when will that come to an end?”

“If housebuilding is slowing down and mortgages are becoming unaffordable, there is a huge need for more rental properties. Where are they going to come from? The Chancellor didn’t answer that question.”

On the sales side, Bryan Mansell, managing director of PropTech company, Gazeal, said that seeing deals over the line was now going to be more important than ever for buyers, sellers and agents.

“The number of deals that are collapsing after a sale price has been agreed, has started to increase dramatically”

It was reported last week that fall-throughs in prime London markets were 80% higher than their pre-pandemic average.

Mansell - whose company specialises in producing digital reservation agreements – said: “You are never going to stop sales collapsing completely but there are ways to make it a more manageable number and reduce the stress, loss of money and frustration that follows when deals crumble.

“And successful house sales are better for the Treasury –  every time a deal breaks down the Government loses thousands in Stamp Duty. It’s a total waste of time and money for everyone involved.”

In his Autumn Statement, Jeremy Hunt confirmed the Stamp Duty cuts announced by his predecessor, Kwasi Kwarteng, would remain in place until 2025 when he would ‘sunset the measure'.