Chancellor Rishi Sunak yesterday unveiled a £1bn fund to remove unsafe cladding from tower blocks, in a move which should help trapped owners who have been unable to sell their homes.
He also confirmed the introduction of an extra Stamp Duty charge for overseas property buyers at 2%, rather than the 3% expected, and not until next year.
However, his Budget was described as a “smokescreen” to gloss over fixing the housing market.
Sunak mainly focused on helping firms deal with the coronavirus outbreak. However, he also unveiled the Building Safety Fund to remove unsafe cladding from all UK buildings above 18m.
Overseas property buyers will have to pay a 2% Stamp Duty surcharge on residential property purchases in England and Northern Ireland from April 2021.
He also pledged £1.1bn of allocations from the housing infrastructure fund to build almost 70,000 new homes in high demand areas across the country.
David Westgate, group chief executive at Andrews Property Group, called for more information on the cladding scheme to be released as soon as possible so home owners can get on with selling their properties.
He said: “The funds have officially been made available but the logistics have yet to emerge.
“In the meantime many people’s lives have been put on hold as they cannot secure mortgage finance and they cannot sell their homes.
“What’s also vital is that the new fund covers rendered insulation as well as combustible cladding.
“In our experience, the cladding issues we are seeing around the UK could soon be surpassed by the problem of rendered insulation.”
The Treasury said the extra Stamp Duty rate for overseas buyers would help fund accommodation for rough sleepers but did not reveal why it was lower than the 3% proposed in the Conservative Party election manifesto, but above the 1% in a government consultation.
The Budget did not mention the Government’s lifetime deposits scheme for renters that was a key part of its election pledges.
Marc von Grundherr, director of lettings and sales agent Benham and Reeves, said: “The coronavirus has been a justified but convenient smokescreen that has allowed the government to gloss over any real details on around fixing Britain’s broken housing market yet again.
“The industry will be familiarly unsurprised but disappointed all the same.”
Nick Leeming, chairman of Jackson-Stops, echoed these concerns.
He said: “It is disappointing that the Government has failed to provide the housing market with a long anticipated reform to Stamp Duty for UK residents.
“This is aggravated by the overseas buyer tax, which could now see foreign purchasers pay up to 17% in Stamp Duty from 2021.”
Richard Donnell, director of research and insight at Zoopla, said: “Dollar-denominated buyers may find that the additional cost is partly offset by currency movements, with an effective discount of more than 20% for those buying UK property now compared to the summer of 2014 – purely due to movements in the pound.
“With Stamp Duty lining the Treasury’s coffers to the tune of £8.3bn as of March 2019, up from £2.7bn ten years ago, it was always unlikely that the Chancellor would consider a significant Stamp Duty reform – particularly without an alternative source of revenue.”
Others were more pleased at the lack of change.
Glynis Frew, chief executive of Hunters, said: “Thankfully some stability in housing when some stability is required. It’s a shame the same can’t be said when it comes to housing ministers.
“Some might be disappointed that the couple of rumours surrounding first-time buyer Stamp Duty relief didn’t come to fruition, but the reality is that it might just be too much of a hit to the Treasury.”
The full Budget document, published after Sunak’s hour-long speech in Parliament, also revealed the Government is working on creating a digital identity market that makes it possible for people to prove things about themselves without showing paper documents.
It said: “This will help make opening a bank account, claiming benefits or buying a house simpler, safer and quicker.
“More secure and cost-effective online transactions will also boost business and the digital economy.”
No further information on this was available.
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