Countrywide's reaction to the Chancellor's Budget

Countrywide plc

Wednesday, July 8, 2015

Commenting on the content of Chancellor George Osborne's Budget, Alison Platt, Chief Executive Officer, said:

“It was great to see the Chancellor use the first Budget of the first majority Conservative government in 18 years to announce that further powers will be going to the UK’s cities, starting with Manchester in support for the northern powerhouse.

“The change to mortgage interest relief will likely be a challenge to the buy to let sector but does address an imbalance between owner occupiers and investors.  Some landlords may decide to sell up, particularly those more highly leveraged.  But tapering in the change from 2017 and many smaller landlords focus on long term capital growth will keep numbers low.  For a Landlord already paying the 40% rate of income tax and an interest only mortgage the change will cost about £1,200 a year, that’s 11 per cent of the annual rent although many will pay less with smaller loans or won’t be incurring the higher rates of income tax.  Contrary to some claims, the change is unlikely to have a significant impact on rents, which tend to be set primarily by the market, not the landlord’s costs.

"It was disappointing that the Chancellor did not take the opportunity to announce proposals that really get to grips with the complicated issues facing the property market. The Government needs to consider whether you can really have a stable, healthy housing market while cutting the safety net and security that social housing and housing benefit provides.

“We think it’s time for the chancellor to reform Council Tax and redress the balance between council tax paid and the average property price, for example in Camden, the average Council Tax paid as a proportion of property value has gone from 1% in 1995 to 0.1% in 2015. Council Tax reform offers a much better alternative to transaction taxes like Stamp Duty, for which homes worth more than £2 million it has weighed heavily on prime markets.

“The private rented sector continues to change and grow. In the last year alone, 421,000 more households have started renting, many of them over the age of 30. We urge the government not to ignore the changes in the private rented sector but rather start work on a cohesive set of policies to make the sector work better for everyone. We think that means more security for those tenants and landlords who want it, more homes from institutional investors and better regulation.”

-Ends-

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