"For our sector, what might this mean? Stamp duty payment moved from the vendor to the seller? Big changes to threshold levels? Significant cuts for properties above £1m?"
No sooner were we preparing for the first Budget of this new Government by a Chancellor that has been waiting nine months to deliver it, than we’re anticipating a Budget which will be delivered by a new Chancellor who will have been in the job for less than four weeks.
Rishi Sunak's promotion to the role will be a surprise to everyone, not least Sunak himself, who might have anticipated the job at some point in the future but certainly not now.
Where does that leave next month’s Budget then? No doubt firmly in the hands of Number 10 who will have bestowed the job upon Sunak in the anticipation that he would toe their particular line far more closely than Javid ever would. This was a power struggle that was only likely to go one way.
Javid’s refusal to sack his entire advisory team is laudable and perhaps tells us exactly where Boris Johnson wants to exert control from. They would have known that Javid was unlikely to have done their bidding in this regard, and therefore the outcome was assured: a new man in Number 11 who they might see as much more amenable.
So what next? Well, that remains the $64,000 question. Any Budget tends to be a push and pull endeavour between the Treasury and the Prime Minister’s Office, but that argument and potential for compromise now looks to be incredibly diminished. Would a new Chancellor a few weeks into his tenure feel the urge to mark a line in the sand already? Against a Prime Minister who has given him the job? It’s very very doubtful.
The contents of the Budget might well have been in close to finished form but what chance now that Dominic Cummings is going through the document with a red pen, redrafting to his heart’s content. If that’s the case then we might well expect a far more radical Budget than we could ever have envisaged under Javid, and all the talk was that his Budget would be far-reaching enough.
For our sector, what might this mean? Stamp duty payment moved from the vendor to the seller? Big changes to threshold levels? Significant cuts for properties above £1m? Dare we dream of cuts to rates for additional properties? Will the landlord community finally be cut some slack?
We’re all aware of the catalyst stamp duty changes can have in the private rental sector, so we might all anticipate a boost to purchase activity if this comes to pass. Watch how property purchasing within limited company vehicles soars if that is the case. Plus, of course, there may be many within the Conservative Party who see this as a real writing of a wrong, that has by all accounts cost the Government tax revenues rather than raising them.
But, I’m getting far ahead of myself here, and it certainly doesn’t pay to second guess what politicians might believe to be a good idea to get ‘the housing market moving again‘.
What we must hope however is that this new Chancellor and his team acknowledge the importance of the PRS to the UK’s housing market – for too long it’s been treated as a second-class citizen when the reality is that without a strong private rental market, the housing gap gets wider and the difference between the housing haves and have nots gets broader.
A carrot and stick approach does not work if you replace all the carrots with sticks and therefore, at the very least, it would be nice to have a Chancellor who understands the PRS and its value. What was already an interesting Budget next month, just got a whole lot more interesting.
