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“Budget has missed a trick”, says property expert

A leading property expert believes Phillip Hammond has “missed a trick” in this afternoon’s Budget Statement by not releasing £3.5bn into the UK economy by reforming rental deposits.

Ajay Jagota of deposit replacement insurance solution Dlighted also believes the Chancellor could have taken the opportunity to stimulate the local housing market by cutting Stamp Duty – saving the average North East house buyer an average of £819.

In a speech strikingly light on measures relating to the housing, only one announcement in this afternoon’s speech could be seen to relate directly to property:

• A clamp down on people incorporating investments into businesses to reduce their tax bills – as some property investors have done in response to recent tax rises affecting buy-to-let landlords, by cutting tax-free dividend allowance to be reduced from £5000 to £2000 from April next year.

A 0.5% cut in Stamp Duty would have saved the average North East house buyer £819, and property purchasers the following areas the below amounts:

• Durham City - £1105 • Gateshead - £692 • Newcastle – £1012 • North Shields – £922 • South Shields – £674 • Sunderland - £700

Ajay Jagota said:

“Just weeks after the Housing White Paper no-one expected the Chancellor to pull any rabbits out of his hat when it came to property, but he’s missed a trick or two when it comes to low-cost measures he could have taken to stimulate both the housing market and the wider economy.

“Even as a prominent Leave campaigner it’s entirely sensible and prudent for Phillip Hammond to put money aside to prepare for the imminent triggering of Article 50. But why did he not take advantage of the £3.5bn currently lost to the British economy in cash tenancy deposits?

“Replacing outdated tenancy deposits with an insurance policy could mean a boost to consumer spending worth billions and increased tax revenues for the Chancellor. Replacing cash deposits with insurance policies could enable renters to invest that money into Help To Buy Isa’s and to save for homes of their own, as Citizen Advice has today argued.

“Stamp Duty makes the mountain first time higher have to climb even higher. Cutting it by just 0.5% could make the difference between being able to buy a house and not being able to buy a house. It would also make up for some of the tax rises buy to let landlords have been hit with in previous budgets, making it harder for them to meet the growing demand for good quality rental homes”

This was posted in Bdaily's Members' News section by Ajay Jagota .