The Budget 2023 | What effect will it have on the housing market? If any!

What is The Budget?

The budget in the UK is an annual statement delivered by the Chancellor of the Exchequer (currently Jeremy Hunt) to the House of Commons, usually in the month of March. The budget outlines the government's plans for taxation, government spending, and other economic policies for the upcoming fiscal year. It is an important event in the UK's political and economic calendar, as it has a significant impact on businesses, individuals, and the overall economy. The budget statement includes information on the government's plans for public spending, taxation, borrowing, and other economic policies that can affect different sectors of society.

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Jeremy Hunt's Budget received feedback from experts in the mortgage and property industries, who noted that there was limited discussion about rising mortgage rates, housebuilding targets, or support for first-time buyers.

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Nick Sanderson, CEO at Audley Group

“Another opportunity for housing reform has sailed on by. An innovative Chancellor would have used his time at the dispatch box to set out reforms that place as much emphasis on later living as first-time buyers. It was unrealistic to expect a stamp duty holiday in the current economic climate, but Jeremy Hunt Chancellor should have considered stamp duty reform. In its current guise it’s a brake to the whole market, which in the long term costs the Treasury more. If there is no fluidity, people stay in family homes that are too big and unsuitable for them. Unsuitable housing leads in turn to more pressure on a stretched NHS compared to a pre-emptive move to a property that can adapt as people age. And yet more housing is needed for first time buyers at a time when there is already a serious deficit.

“In contrast there is a desperate need to increase the provision of age specific housing in the UK, but the sector has been largely ignored by successive chancellors. There is little time to waste. The groundwork must start now, if we are to see any benefit in the next few years.”

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Adam Oldfield, chief revenue officer at Phoebus Software

“We were told not to expect a budget with sweeping changes and unfortunately, as far as the housing market is concerned, that’s exactly what we got. There were measures to alleviate the rising cost of living and get more people back into work, which may give a boost to confidence. However, it is clear that the growth the government is expecting to see from the measures announced in the budget is not expected to come from the housing market, despite growth being a priority.

“Once again, despite many calls for change, the Chancellor has skipped over stamp duty land tax. The antiquated tax is a costly barrier but unfortunately, at over £14 billion last year, it contributes far too much to the Treasury’s purse.

“Nonetheless, the housing market is notoriously resilient. So perhaps it will be enough that the OBR expects inflation to come down to 2.4% by the end of the year, while the economy continues to grow, for interest rates to steady and for confidence to return.”

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Co-founder and CEO of Wayhome, Nigel Purves

“The nation’s first-time buyers are currently tackling the highest cost of homeownership on record and it’s bitterly disappointing to see the government turn their back on them yet again. Having afforded them some brief stamp duty respite during the pandemic, they clearly feel their job is done and have now left them out in the cold to fend for themselves.

While we certainly weren't expecting another stamp duty reprieve, nor do we believe these intermittent discounted buying costs are the answer, a commitment to at least building more homes would have been a start.

We were also hoping to see amendments to stamp duty laws to bring parity for all homebuying schemes. This would allow those who utilise additional methods, such as Gradual Homeownership, to be afforded the first-time buyer rate of stamp duty tax when they do come to purchase their home, rather than the rate applied to an existing homebuyer.”

Leeds Building Society CEO, Richard Fearon

“We welcome this Budget as an effort to return sound economics to the heart of government and provide a plan for growth.

“It is however a missed opportunity to grow the economy by addressing the UK’s home ownership crisis caused by a lack of housing and show support for savers.

“While it is particularly positive to see support for families with young children struggling with the cost of childcare, we know that owning your own home also brings huge economic, education and health benefits.

“With the affordability of home ownership now at its worst point for 150 years it is clear that support for first time buyers must be a key battleground at the next General Election.”

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Paresh Raja, CEO of Market Financial Solutions

"It's no secret that there are issues requiring attention in the property sector, most notably where housebuilding activity, planning regulations and the national housing stock are concerned. Clearly, as Hunt looked down his list of priorities for this particular Budget, these items were overlooked in favour of other pressing concerns.

"In truth, the property market could benefit from the Chancellor's prudent economic approach. While there may not have been any noteworthy policies or investments relating specifically to property, his efforts to combat the cost-of-living crisis and bring much-needed stability to the economy should be welcomed.

"We saw how tumultuous the effects of the mini-Budget were back in September. The ill-fated announcement fuelled significant interest rate changes and a great deal of uncertainty. Hunt has favoured a cautious approach, and the property market will likely benefit from a sense of economic calm, particularly if inflation continues to fall and interest rate hikes come to an end."

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Jeremy Leaf, north London estate agent and former RICS residential chairman

"We wanted to see more from the Chancellor, particularly with regard to increasing supply of new homes to keep prices in check, as well as increased support to encourage new landlords and discourage others from leaving the sector.

"In some ways it could be seen as a positive Budget in that the Chancellor left the housing sector well alone. Housing makes such a significant contribution to economic prosperity due to its multiplier effect so is sensitive to even small changes.

"More specifically, the housing market is all about confidence and sometimes you can do more damage by tinkering so we will give him a B-plus for effort and not doing anything which could have been harmful and compromised activity."

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Tomer Aboody, director of property lender MT Finance:

"The housing market has settled down after the fallout of the mini-Budget and thankfully there doesn’t seem to be anything in this Budget to upset the apple cart.

"There are fewer transactions as rising interest rates and the cost of living mean affordability is more of an issue but the real concern around transactions is that they are taking so long. It would have been good to see some reform of stamp duty, particularly for downsizers, to encourage more transactions but the Chancellor has chosen not to intervene at this stage.

"The OBR forecast for inflation at 2.9% by the end of the year is extremely welcome and will have a further settling effect on the market should this prove to be accurate. It already looks as though interest rates may have peaked or are close to doing so, and inflation falling so decisively will help with that.

"With sentiment better on the economic side than it has been in recent months, this Budget should be a welcome boost for confidence."