Response to the Autumn statement
Carter Jonas has responded to measures outlined in the Autumn Statement that affect housing, infrastructure, and the rural economy. It also reiterated hopes that the Government will tackle the planning system to speed up housing delivery and reform stamp duty.
On funding for housing
James Bainbridge, Head of Planning & Development, Carter Jonas, said: “All the extra funding for housing sounds marvellous, but clear directives need to be put in place on how it should be allocated and accessed. There have been many attempts to provide funding over the years, but the initiatives often fall down in administration as it can be difficult to get the various Local Authorities and public sector bodies to agree on how funding should be allocated and work in practice. Where there is a problem with viability, affordable housing often takes the knock, particularly in areas where the Community Infrastructure Levy is in place, so site specific funding for infrastructure could address this where viability issues are acknowledged.
“However, I expect developers will be unable to spend a penny of funding without a planning permission. The current planning system remains the fly in the ointment in the pledge to deliver more housing – affordable or otherwise. There is an issue surrounding funding on some sites where there are heavy infrastructure burdens, but what is holding up a step change in supply is local authorities’ inability to get Local Plans in place and their inability to move quickly to grant planning permissions and clear down pre-commencement conditions. Addressing these issues directly will enable developers and housebuilders to get on and start building homes.”
On the planning system
James Bainbridge, Head of Planning & Development, Carter Jonas, said: “The planning system is still not working in an optimal way to enable sites to be brought forward to address the much publicised housing shortfall. We would like to see greater emphasis placed on Local Plan adoption and, crucially, granting implementable planning permissions for allocated sites. The Government needs to provide clear guidance on the application of the national affordable housing threshold and, as identified by the Local Plan Experts Group, a standardised approach to calculating the objectively assessed housing need and housing land supply.
“Remodelling the local Planning Committee process to include compulsory training for members and a ban on untrained substitutes would ensure a more efficient process overall and that sites are assessed on a needs basis. As always, we would welcome a significant increase in the number of government inspectors to reduce the excessive timescales currently associated with appeals. Along with further efforts to identify suitable sites, these relatively simple measures could have a transformative impact on the delivery of housing across the UK.”
Mark Hall-Digweed, Head of Infrastructure, Carter Jonas, said: “The announcement that the government will be investing an additional £2.3bn into the UK’s infrastructure demonstrates on-going confidence and commitment by Government to major and local infrastructure projects, connecting and improving the UK regions and bringing to life the decentralisation agenda.
“This couldn’t come at a better time where recently there have been questions around PM May’s commitment to continuing pledges made by per predecessor concerning investment in major infrastructure projects. The £1.1bn granted to local transport networks, including the renewed plans to deliver the Oxford to Cambridge ‘growth corridor’, not only highlights the increasing importance placed on connectivity of the local regions, but also a long-term plan to enhance the economic performance of these hubs.
“Investment into national or local infrastructure is mutually beneficial, as local infrastructure can only be made possible by national initiatives, and national infrastructure relies on smaller scale projects to deliver broader visions. In light of the new funding, we are confident in the emphasis that the government has placed on improving our built environment, setting a strong, positive course for growth, and delivering the opportunity for progressive innovation in the sector.”
Lisa Simon, head of lettings, Carter Jonas, said: “The Autumn Statement is set to exert further pressure on landlords. With lettings agents now banned from charging fees to tenants on average according to Arla of £200 admin fee which enables agents to carry out various checks and procedures to ensure the property is ready for market and meets the heavy statutory requirements now in place for letting, landlords will inevitably bear the additional fees.
“This is set to exacerbate the current plight of the buy to let market, which is already reeling from the recent influx of government legislation, and is set to end the medium-earning, single unit landlords who have elected to invest in property either to generate income or supplement their pension. With savings earning so little in the bank, many have been looking for small capital gains, but simply don’t have the means by which to grapple with the additional 3% SDLT levy, the tapering off of tax relief, and the end of the 10% tax relief on wear and tear costs.
“The buzz word of the moment is PRS and, with government legislation exerting such pressure on an average landlord, we are likely to surrender a large proportion of the buy-to-let market to big corporates – much like in Spain and Germany, where PRS is dominant.”
On stamp duty
Rory O’Neill, Head of Residential, Carter Jonas, said: “In bypassing Stamp Duty revisions in the Autumn Statement, the Chancellor has missed a prime opportunity to revive the top end of the market, not least because current inactivity can be traced back to the reforms of November 2014. Stamp duty is the only negative stalling the market - even the attractiveness of the pound to dollar based buyers, affordable borrowing and pent up demand cannot overcome the crippling transactional costs of moving house.
“With vendor’s reluctant to adjust the asking price of their property and an emerging reliance on overseas money to inject liquidity into the market, we are continuing to cultivate a potentially toxic landscape for residential property.
“A reduction in Stamp Duty costs is the final catalyst that the market needs to boost transactions and we will lobby for this in the Spring Statement. Of course, the top end does not operate in isolation and, if left untended, could create a bottle neck at the entry points sought after by first time buyers.”
Tim Jones, Head of Rural, Carter Jonas, said: “Whilst the strength of our economy is frequently assessed by the health of our large towns and cities, we welcome the Chancellor’s attention to the rural economy in today’s Autumn Statement, by doubling the rural rate relief to 100 percent by 1 April 2017. This will provide a much-needed boost to rural businesses, removing the inconsistency between rural rate relief and small business rate relief, which is critical in maintaining our country’s food supply, landscape and wildlife.
“We would, however, like to see the Government take this one step further and work collaboratively with the rural industry on the best long-term workable solutions for the sector through favourable policy initiatives, subsidies and support to maintain a vibrant rural economy.
“Infrastructure plays an insurmountable role in the rural economy’s success. This is not just about transport networks, but connecting people, communities and businesses to enable the construction of much needed homes, energy grids and inward business investment. The shift by the Chancellor to place an equal weight on local infrastructure projects to that of large-scale national ones with the allocation of £1.8 billion through the Local Growth Fund, will equal the playing field between local infrastructure projects and large-scale national initiatives, bringing the decentralisation agenda to life by connecting and improving UK regions up and down the country where investment is long overdue.”