Stagnant UK property market is bad news for the government’s target of 1.5 million new homes
The government will miss their target of 1.5m new homes due to a stagnant property market, say leading audit, tax and business advisory firm, Blick Rothenberg.
Heather Powell, a partner at the firm, said: “The latest property statistics published by HMRC are bad news for the Government’s target of 1.5m new homes. They show a stagnant market with low appetite for buying, which means there is no motivation for builders to build.”
She added: “Property sales continue to be steady. There has been no major increase in the number of residential or commercial properties sold per year in comparison to the last three years. A huge injection of confidence is required to end the market’s stagnation, but the chancellor, Rachel Reeves, seems to be bereft of ideas on how to generate this.”
Heather said: “The chancellor is going to have to reflect on the impact this will have on Stamp Duty Land Tax (SDLT) receipts, as well as all of the taxes that are collected as a result of property moves – VAT on move costs and refurbishment and taxes payable by the businesses selling to the new property owner.”
She added: “This continued stagnation is not surprising. People are worried about the cost of living, job security and the cost of a mortgage and so are not rushing into home ownership – or stepping up the housing ladder. Commercial investors, the buyers of offices, factories and similar buildings have similar concerns – will tenants be found, will they be able to pay the rent, and will the rent received cover interest charged by lenders?”
Heather said: “HMRC’s statistics highlighted an increase in the number of sales in March compared to February, which reflects the annual trend as the UK moves into the summer months. But property prices are unlikely to increase significantly over the next twelve months, so buyers will not rush to purchase a property.