Next month's Budget is a golden opportunity to reform Britain's broken housing market and get the country moving again, according to the Intermediary Mortgage Lenders Association (IMLA).
The IMLA is calling on the government to apply a ‘big thinking’ approach to housing in its upcoming Budget announcement in order to start encouraging greater investment in the housing market.
As he prepares for his first Budget on March 11, new chancellor Rishi Sunak is under growing pressure to introduce sweeping changes such as a higher threshold for paying stamp duty and greater support for the private rented sector.
Landlords are still adapting to the implementation of recent tax and regulatory changes including the reduction of tax relief. But the IMLA argues the private rented sector is a vital part of the housing market, supporting both public and private sector tenants, and that the government must avoid any further regulatory or tax changes that could push landlords to exit the market.
The IMLA is also calling for more social housing to be built in order to ‘re-balance’ the housing market. It wants this to be part of the overall vision to achieve a sensible, balanced approach to housebuilding that appropriate housing is available to everyone, whatever their financial circumstances.
A review of the stamp duty should tax take and its impact on property transactions is also necessary, according to IMLA.
It has also called for a review of stamp duty across the whole range of property values, arguing that a revamped structure could reduce current barriers to moving without significantly impacting tax revenues.
The IMLA also wants to see a more ambitious commitment to housebuilding.
The Conservatives recently pledged to build ‘at least one million’ homes over the next five years, with support measures included for first-time buyers and pivate renters.
Just over 240,000 new homes were finished in 2018-19, according to data released in November last year, indicating that the one million target could be surpassed.
Kate Davies, executive director of IMLA said: “The new government’s first Budget presents an opportunity to take a real stride forward in its commitment to fixing Britain’s housing market – which the Conservatives themselves described as ‘broken’ in their wide-ranging white paper [published in February 2017].
“It’s clear Boris Johnson is bringing a ‘big thinking’ approach to policy making and major capital projects – from his thumbs-up for HS2 to rumours of a Boris Bridge – and we’re urging the Government to bring a similarly bold approach to housing.
“Getting the strategy right means committing to a long-term vision – and with its sizeable majority, the government is well-placed to co-ordinate that vision across all departments. We don’t just need more homes – we need the right size and design of well-built, energy-efficient homes, which are properly serviced by a well-planned infrastructure including roads, schools, hospitals and public transport networks.
“The pledge to build 200,000 houses a year is welcome – but the fact that that target has already been met over the last five years indicates that the government could be more ambitious. We need thorough analysis of what the UK’s housing needs are going to be over the next 20-30 years – and real leadership to deliver that.”