Cuts to Stamp Duty and a shot in the arm for the Northern Powerhouse are both on the local wishlist ahead of the Chancellor’s first Autumn Budget on Wednesday. Tony McDonough reports
Chancellor Philip Hammond will stand up in the House of Commons on Wednesday to deliver his first Autumn Budget with the UK’s housing crisis set to be a top priority.
YBNews has spoken to a number of business people in the Liverpool city region both about what they think the Budget will contain – and what they would like to see.
There are strong calls for a cut in stamp duty and also for a greater emphasis on infrastructure spending in the North of England.
Liverpool City Region Metro Mayor Steve Rotheram is calling for a devolved housing investment fund for the city region; a “radical” Housing First model to tackle homelessness and rough sleeping; and a Stamp Duty Holiday to create a fund to remediate uneconomic brown-field land.
He also called for investment in infrastructure, adding: “We are still facing a situation where for every £1 spent on infrastructure in the North, £6 is spent in London and the South East.
“This is not just about fairness, it’s about recognising that rail connectivity, a modern and efficient transport system, state-of-the-art digital connectivity and exploiting our renewable energy and science assets are absolutely fundamental to our economic future.”
Peter Taaffe, managing partner of leading Liverpool city centre accountancy firm BWM, said: “Sandwiched between Brexit and his dogmatic determination to plough on with the austerity programme, Chancellor Philip Hammond has very little room for manoeuvre in his 2017 Autumn Budget.
“Under pressure from an opposition with the wind in its sails, the Government has pledged more resources for policy areas such as education, transport and housing – but where will the money come from?
“There could be a long-expected raid on pensions or he could launch a Labour-lite raid on the wealthy. Certainly there was a degree of public anger over the recent revelations of offshore tax avoidance.Closing a few of those loopholes would be a popular move and may even generate some extra revenue for the Exchequer.
“If there are extra spending commitments we would hope the North would get its fair share
“It is thought stamp duty could be set for a shake-up in the Budget. If the Government removed stamp duty for older homeowners it would encourage people to downsize and free up homes for younger families.
“Stamp duty land tax has also stalled high value sales and if they were to take steps to reform the impact stamp duty has on the top end of the market it would help to get the market moving again at all levels.
“Another option could be to switch the liability from buyers to sellers which would increase mobility at all levels, as people moving up the ladder would be paying duty on the lower-priced house that they are selling rather than buying.
It would also help more first-time buyers on to the ladder, while maintaining the valuable source of income for the Treasury.”
Mr Taaffe’s call on stamp duty was echoed by those working in the local residential property sector.
Helen Griffin-Booth, director at Liverpool-based sales, lettings and investment agency Bluerow Homes said a Stamp Duty cut would help first-time buyers get on the property ladder.
In England, homebuyers have to pay stamp duty on a residential property that costs more than £125,000. The purchase of the average home in England – worth £226,000 – would incur a stamp duty bill of £2,000.
Ms Griffin-Booth said: “The number of homeowners under the age of 45 in England has dropped dramatically since 2010. Many young people feel locked out of the housing market due to sky-high costs, with stamp duty being a key contributor to this.
“Stamp duty land tax can add thousands on to the cost of buying a home and makes many people reluctant to move.
Scrapping or even going some way to reduce stamp duty would help aspiring first-time buyers address one of the biggest obstacles to entering the market – raising a deposit.”
Mortgage advisor Alan Cotterill of Just Mortgages said if the Chancellor did not tackle the housing crisis it could scupper the Conservatives chances of winning the next General Election.
He explained: “It is widely recognised that that there is a chronic shortage of housing generally across the UK and specifically in the North West. For many years supply being low and demand rapidly increasing has driven property purchases up and beyond the reach of first-time buyers.
“Without first-time buyers initiating the property purchase chain there are no house buyers moving up the chain to second and third family homes which then stagnates the housing market in its entirety.
“In October Teresa May announced extra Government spending of £2bn for small housebuilders and developers to fund more social housing and affordable housing.
“I will be very surprised if the Chancellor does not provide additional funds to target this sector of the housing market in the shape of loan guarantees and incentives to builders and developers to increase investment.”
Ming Yeung, managing director of Liverpool-headquartered developer YPG agreed with Mr Cotterill on the need to build on the Prime Minister’s £2bn pledge on affordable housing and also urged the Chancellor to put more money into infrastructure in the North.
He said: “For the Government’s recent public recommitment to the Northern Powerhouse to be more than a hollow platitude, the Budget must contain concrete measures to redress the North-South transport spending disparity, and deal with East-West connectively problems.
“There is a strong consensus amongst business and civic leaders that better connectivity will unlock growth in Liverpool, Manchester, Leeds, Hull and surrounding areas.
“That people living in the capital receive six times more spending per head than those living in the North is shameful.”
And, Neil Kirkham, director at commercial property consultancy CBRE in Liverpool, also said better infrastructure was key to the Liverpool city region’s future prosperity, saying:
“One of the biggest issues for Liverpool’s economy right now is the shortage of grade A office space and the knock-on effect this has on the city’s ability to attract inward investment.
“What Government can do is support us to create the right conditions to attract companies from outside of our region. Key to that is having the right infrastructure – both physical and digital.
“A commitment in the Budget to funding major transport improvements, such as the proposed ‘Crossrail for the North’, as well as better digital connectivity in the Liverpool city region would underpin the efforts being made on the ground to attract new businesses.
“There has been lots of discussion around the Northern Powerhouse and what we need to see now are real signs of commitment to this initiative, with public expenditure to improve connectivity.”