Leading land brokers Aston Mead have criticised the plans announced by the Chancellor in the Government’s latest Autumn Statement.
In his speech on Wednesday, George Osborne announced an additional three per cent stamp duty on buy-to-let properties and second homes, which would raise an extra £1bn by 2021. He said that this money would help pay for 400,000 new homes and new ‘help-to-buy’ initiatives, with up to £60m going to help home-buyers in places where holiday homes have forced up local prices.
Aston Mead Director Charles Hesse said: “On the face of it, these changes may appear to be good news for the property sector. But dig a little deeper and you find that they are simply misguided. That’s because they fail to address the underlying problem – which is that the planning system in this country is too restrictive to allow sufficient numbers of homes to be built. A reform of our restrictive planning rules and regulations is where the Government should be focussing its attention.”
Charles Hesse said that the new taxes simply added yet more complexity into the house buying process. He explained: “What the Chancellor has announced will punish landlords and choke the market. Instead he should be allowing green belt development and relaxing the restrictions on building height. Both of these moves would have achieved what he was looking for, without the need for additional spending.”
Charles Hesse says that the announcement of 400,000 homes is a step in the right direction, but doesn’t make up for years of under-supply. He suggests that an alternative approach which relaxed planning controls would have had a swifter, more effective impact than the current plans, as well as increasing the number of affordable homes.
He explained: “Overly restrictive planning regulations are at the root of the problem here. Reforming them would help the market to function more efficiently. A more efficient market leads to more properties of all kinds being constructed – including those in cheaper price brackets.
“In short, it’s no good announcing the release of more public land for homes, if planning restrictions make it almost impossible for such homes to be built.”