Osborne also opted to keep property taxes and the rate of stamp duty unchanged, something some estate agents have called a “missed opportunity.”
Nick Barnes, head of research for Chesterton Humberts, was disappointed in what he called the statement’s lack of “any new measures aimed specifically at helping first time buyers. A nice gesture would have been to re-introduce the stamp duty land tax holiday — at a realistic level of say £200,000 nationally and £375,000 in London — for first time buyers.
The announced funding for infrastructure is expected to impact house prices, particularly for developments near major transport links.
While he said the statement lacked ideas to “help stimulate the housing sector,” Robert Bartlett, chief executive of Chesterton Humberts, supported the statement’s proposed £1bn funding for the Battersea Power Station redevelopment. “I don’t think it would be much of an exaggeration to say that the extension of the Northern Line to Nine Elms and Battersea Power Station will act as the catalyst to one of the most significant rises in property values to be seen in a single area of London over the next few years,” Bartlett said.“Better accessibility to this area will attract more home owners, businesses and local employment and have a significant positive effect on the local economy south of the River. From a property value perspective, these are all factors that have a significant impact on driving value.”
The Royal Town Planning Institute (RTPI) welcomed the investments in infrastructure, including the roll-out of broadband in the east of the country, which could make areas and properties more appealing to buyers. RTPI president Colin Haylock said: “We are also glad there was no new reform or adjustment of the planning system announced. Planners, developers and communities need a period of stability and certainty in order to deliver the growth that is sorely needed.”
Some parts of the rental sector are waiting to see if there will be an impact on the market caused by the decision to freeze housing benefits. Osborne said the local housing allowance rates “will be uprated in line with the existing policy next April and then we will cap increases at one per cent in the two years after that.”
The chancellor said the move is intended to help curb welfare spending, of which housing benefit is the third-largest component. “For this measure, 30 per cent of the savings will be used to exempt areas with the highest rent increases from the new cap.”
David Orr, chief executive of the National Housing Federation, said: “We welcome the measures announced to boost housing supply. However, we are concerned about the benefits announcement.”