Head of Residential Agency for carter jonas Harrogate
Despite the government’s Spring Statement being somewhat overshadowed by our pending divorce from the European Union, the Chancellor missed an opportunity to inject some much-needed energy back into the property market.
Beyond the rhetoric and purported end to austerity, it is always worth breaking down the details and reflecting on the implications for our local market.
Second steppers were, once again, overlooked in Philip Hammond’s announcement. Many out there are left struggling as they attempt to make the move further up the ladder, having outgrown their property and in need of a larger family home. We aren’t talking about upgrading a property – we are simply talking about being able to afford a home that has enough space to accommodate a growing family.
The Chancellor took pride in announcing the government’s restoration of the proportion of first-time buyers to above 50 per cent for the first time in a generation - and the additional funding for the Affordable Homes Guarantee scheme and from the Housing Infrastructure Fund will only aid this further. That said, this will leave the market more congested in the middle. While more first-time buyers can take their first step onto the ladder, the challenge remains as to how far they can climb it and how quickly.
While the Harrogate market is still transacting, thanks to its underlying strength, there is a sense that the Philip Hammond missed a trick in failing to unlock movement further up the ladder. Research demonstrates time and again that Brits are delaying important life decisions such as when to start a family, simply because they can’t afford to upsize.
Furthermore, with such political uncertainty underpinning Britain’s collective consciousness, very few homeowners are incentivised to put their home on the market right now, which is impacting stock levels and creating impediments for both upsizers and downsizers.
The government should have considered imposing measures that would better support the allocation of existing stock.
To that end, a Stamp Duty holiday for older people, who typically occupy just a portion of a larger property, would have encouraged greater movement in the market. We can’t emphasise enough the opportunity that downsizers could unlock if they felt empowered and incentivised enough to sell.
When it comes to the Harrogate lettings market, where investment potential continues to show promise, we believe that landlords choosing to keep hold of their portfolios can still reap the rewards. Although the Chancellor has failed to provide any additional support for landlords – particularly in light of the continued changes to fees and tax legislation - we expect rents to continue on an upward trajectory, thus providing a steady income for those who are prepared to invest longer term.
We would have liked to have seen the Chancellor breathe some more life back into the UK’s private landlord sector, alleviating some of the operating costs that are, at present, discouraging some landlords from making investments in new properties and improvements to their existing portfolios. The current, ‘one size fits all’ lettings legislation poses challenges to small-scale landlords, however we are fortunate that Harrogate harbours an enduring appeal, where demand investment potential remains strong.