The Prime Minister and the Chancellor have been evidently caught between a rock and a hard place.  The pressure of plugging a £55bn fiscal hole has led to an Autumn Statement that does nothing to address the deepening housing crisis and tackle the shortage of decent affordable housing in Britain. As pointed out by our MD David Alcock a few weeks ago (link), the recent mortgage market madness has a more subtle, perhaps less visible, and long-term impact on prospective home buyers by affecting housing supply in an already undersupplied market. Yesterday’s Budget failed to ease the pressure.

No support for buy-to-let landlords would be catastrophic for rents

Yesterday’s Autumn Budget did nothing to address the lack of housing supply and will do little to settle the nerves of the buy-to-let landlords. Amid rising interest rates, buy-to-let landlords are seeing the value of their assets decline, while borrowing costs and property maintenance continues to increase. These issues were overlooked yesterday and are harming the viability of owning a buy-to-let property. And while buy-to-let landlords’ portfolios may not be a priority for the government, the potential impact that selling part of those portfolios would have on the property market is worth thinking about. The increased pressure on many landlords to sell their properties would put further downwards pressure on a market that is already struggling, and this outcome now looks increasingly likely. According to a study by MFS, 40% of buy-to-let landlords are now planning on selling one or more of their properties in the next 12 months, while the fast-changing economic climate is also deterring investors from investing in the sector - more than a third are cutting back on expanding their portfolio. Such an exodus from the market would present an awful challenge to an extremely competitive private rental sector that is already struggling with growing demand and a perpetual supply shortage. The Government’s failure to support buy-to-let landlords would exacerbate this situation and result catastrophic for renters already under pressure from fast rising rents in places like London or Bristol.

We need a replacement to the Help To Buy Scheme

With young people grappling with higher energy and food costs, the prospect of owning a home is fast becoming an unattainable dream for many and has turned into one of the biggest socioeconomic challenges of our time. But yesterday’s Budget overlooked the pressing issue of home ownership, thus kicking this problem into the long grass. Therefore, we urge the government to design and put forward a replacement to the Help to Buy scheme to avoid a slowdown in home construction years to come.

Planning reform is urgently needed

Yesterday’s Autumn Budget failed to acknowledge and address the challenges of Britain’s antiquated planning system that are holding back the country from building the new homes it desperately needs. As pointed out by our CEO Yann Murciano recently (link), the planning system and the speed at which it operates has been one of the biggest hurdles in the development of UK housing and is why so many mid-size housebuilders have closed or been absorbed by larger market players in the recent decades. In 1988 small builders were producing 40% of new-build homes, compared with just 12% today. Planning committees and their structures need overhauling to save developments being caught in months, if not years, of process treacle. Planning reform is needed, and we urge the government to ease obtaining planning consent. This will, in turn, encourage rapid development of new housing.

Our doors remain very much open - whether we’ve lent to you before, whether we’ve never spoken with you but you’re worried your existing lender is going to let you down so are exploring your options, or whether you’re feeling positive that now’s the right time to invest and want to ensure you have the capital to opportunistically do this, please get in touch and we’ll see if we can help.