Stamp duty reform is at the top of the UK's property industry wishlist for when Chancellor George Osborne opens his red box to deliver the Budget on Wednesday.
1. Reversal of recent government stamp duty changes
Recent UK stamp duty reforms are having a damaging impact on the housing market and should be reviewed.
The Stamp Duty Land Tax (SDLT) changes announced in the 2014 and 2015 Autumn Statements have already notably dented the confidence of both domestic and foreign buyers.
Coupled with the tax changes to non-dom status buyers will be wondering: what next?
Even The Treasury itself has lost over half a billion pounds in revenue during the period as a result of the changes.
2. More pragmatic support for SME developers
There has been a string of policy announcements to help smaller developers over the past 2 years. However, how effective will the policies be in practise?
For example, measures aimed at enabling SME housebuilders to take on projects they were previously unable to by offering sites with planning permission from public land are a step in the right direction. But with only 13,000 homes directly commissioned by the government across only 5 sites, this is barely a drop in the ocean against targets to build a million more homes by 2020.
To truly address the housing crisis facing the UK, the government needs to be more pragmatic in its approach to supporting small and medium sized developers – on funding the solutions to the viability gaps on these sites, investing in the required infrastructure, and bolstering the home and communities agency’s coffers so they can provide funding alongside private financiers.
3. New approach to financing brownfield sites
At the start of 2015, the Coalition government announced plans to get planning permission on 90 per cent of brownfield land. Since then 28 housing zones have been identified which could deliver 45,000 homes.
Many of these sites will be developed in public private partnerships and will require specialist financial structures possible only through a thorough understanding of development and security, so that financiers can get comfortable with the revenue and risk of the projects. Yet some of the most innovative financiers in today’s market such as alternative non-bank lenders are not invited to the table.
Working with a greater number and variety of financiers could be the key to unlocking development of brownfield sites and the government should recognise this going forward.