"Much-needed breathing space": London business leaders react to Spring Budget 2021
Chancellor of the Exchequer Rishi Sunak has today unveiled his annual budget.
In the Spring Budget 2021 announcement, the Chancellor outlined plans for measures to extend the UK’s furlough scheme as well as support the housing market and a rise in Corporation Tax.
Bdaily spoke with business leaders across London to get their reactions to this year’s budget and what it means for various sectors.
Matthew Tooth, chief commercial officer at LendInvest
“It is welcome news to see the Stamp Duty Land tax deadline extended in the Chancellor’s Spring budget today. This extension will not only alleviate a lot of the mounting pressure that is currently on lenders, but also conveyancers, intermediaries and other professionals involved in property transactions.
“Since the initial announcement of the Stamp Duty holiday, the housing market has been booming with a record volume of deals, which has certainly been felt at LendInvest. This extension will provide ample fuel for this to continue, as the country navigates its way out of a pandemic triggered recession.
We can expect this decision to have a positive effect on house prices. Last year we saw a six-year high for residential price growth at 7 per cent, partly driven by the first Stamp Duty holiday implementation by the Chancellor.
“Whilst previous analyst expectations for 2021 predicted stable growth of between 1 per cent – 1.5 per cent, combined with the highly successful vaccination drive in the UK, we can now expect higher growth for the market over the next quarter.
“It is also great to see the government keeping the housing crisis front of mind within this budget, by launching a mortgage guarantee initiative to help keep the property market moving.”
Neil Weston, principal of Scout Financial Services
“We are thrilled to see Government support for first time buyers included in the Chancellor’s Budget today. We have been calling for greater support for mortgage lenders in this space for a while now and action on this was promised by the PM back in October, so it’s great to finally see a plan in place.
“Whilst the availability of mortgages for 90 per cent of the purchase price has improved recently, the market has remained restricted by tight lending criteria and the lack of high loan-to-value mortgages.
“More support for lenders to lend a higher percentage of the purchase price will no doubt be welcomed across the industry and by first time buyers.
“However, many first time buyers may find themselves in a tricky position where they will now have enough money saved for a deposit, but they are unable to secure a mortgage as a result of being furloughed.
“Recent Treasury figures indicate a total of 4.7 million Brits remain furloughed, many of whom are would-be first time buyers in sectors such as retail, travel and hospitality.
“Furloughed workers looking to buy a home face far fewer mortgage options, with many lenders refusing to consider furloughed income at all. This announcement from the Chancellor today does little to alleviate that; if anything, the extension of the furlough scheme will only exacerbate the problem.”
Vic Darvey, CEO of Purplebricks
“The three month extension will come as a real relief for many movers who are now likely to complete in time. For these people, it’s a welcome reprieve and gives them, the industry and the wider economy some much needed breathing space.
“However, it will still be disappointing news for many others - especially those who put their house on the market due to the promise of stamp duty savings and could still miss out on their dream home, if they don’t complete in time.
“Many people have found it impossible to take that crucial first step onto the property ladder. But home ownership should be within more people’s reach and this is a real boost for first time buyers or people with smaller deposits.
“Creating more home-owners not only makes the market fairer, but it also adds much needed dynamism to the property market and the economy as a whole.”
James Lynn, co-founder and co-CEO of Currensea “The Chancellor’s update is of course welcome to travel, as is the uptick in bookings in response to the PM’s announcement last week, but sadly the travel industry is still not in a good place.
“The spike in bookings is of course both encouraging and helpful to the travel industry, enabling it to build an understanding into consumer confidence around travel so companies can plan accordingly and be prepared for lift off. #
“However, I worry that despite ongoing support, without the announcement of a specific cash injection into the travel industry, many will struggle to support this large uptick in bookings.
“We must not let our fantastic travel sector down, who have been doing all they can to stay afloat during the last year.”
Bryan Mansell, co-founder of Gazeal
“The Chancellor’s Budget inevitably focused on extending much-needed support in response to the Covid-19 pandemic. However, as we move through 2021, the Treasury’s focus is likely to turn to closing the spending gap caused by the health crisis.
“The announcement of a three-month extension to the stamp duty holiday – and a higher tax threshold until September - will generate plenty of headlines as, according to Rightmove, it will facilitate an additional 300,000 transactions and £1.75 billion of savings.
“Although it’s positive to see the government listen to the views of agents and conveyancers on the coalface, as well as the property-buying public, more consideration should have been paid to calls for a more specific tapered end to the tax cut.
“A three-month extension - and additional help until September - will be more effective than an additional six weeks, which was previously rumoured to be in the Chancellor’s plans. However, it still creates a cliff-edge so even though more buyers will benefit from stamp duty savings than previously thought, there will still be some who miss out.
“A stamp duty-related boost, combined with the vaccine rollout as we move into spring and towards summer, means the market should be in good health over the coming months with agents able to complete existing transactions and build their future pipelines.
“Once the stamp duty holiday comes to an end, it will be time for the market to move on. As we come out the other side of the pandemic, it would be pleasing to see the government return to its pledge of improving the home buying and selling process through increased efficiency and transparency.
“Improving security for consumers, reducing the chance of fall-throughs and making the moving process more efficient would not only help buyers, sellers and agents, but more transactions going through would provide the Treasury with an increase in much-needed stamp duty revenue.
“Meanwhile, news that the government is launching a guarantee scheme to bring back 95 per cent mortgages provides prospective buyers with a further boost.
“A new scheme designed to help people onto the housing ladder could see demand for homes increase. However, whether the required number of homes to meet rising demand will be available is doubtful as there remains a serious housing shortage in the UK.
“With this in mind, it’s disappointing that we are yet to hear more about how £20 billion pledged to support new housing last year, which includes a £7.1 billion National Home Building Fund, is being used to address this shortage.”
Ian Warwick, managing partner at Deepbridge Capital
“Today’s budget has been rightly focused on economic recovery and jobs. With any period of economic recovery, it is agile companies which tend to lead the way.
“The UK continues to be a leader in the start-up and scale-up ecosystem and this will be increasingly important over the months and years ahead.
“As well as the Covid-specific measures introduced by the Chancellor, initiatives such as the Enterprise Investment Scheme will continue to be vitally important in empowering growth in the UK.
“Given the economic impact of the global Coronavirus pandemic, it is remarkable that we have such buoyant OBR forecasts for the coming years. Now that the healthcare crisis is hopefully approaching the end, economic recovery was quite rightly at the centre of the Budget.
“We fully expect that the innovative technology and life sciences companies that we work with will be at the forefront of this recovery. Entrepreneurs and scale-up businesses will lead the way for growth.
“The announcement of a Recovery Loan Scheme, with a Government guarantee to lenders of 80 per cent, is welcome news for all businesses. In the UK, we have a great funding eco-system which this Scheme will further support.”
Mark Amis, regional director for London at Lloyds Bank
“The announcement of the business rates holiday extension, as well as continued VAT cuts and Restart grants, will no doubt be welcomed by the city’s hardest-hit hospitality and leisure firms.
“The roadmap out of lockdown provided by Government has given some glimmer of light at the end of the tunnel, but it remains clear that firms across hospitality and leisure will need as much support as possible to aid their recovery.
“Our latest Business Barometer revealed that London business confidence crept up again in February, which we hope to see continue in the coming months as restrictions lift.
“We remain by the side of firms across the capital to help them emerge from the disruption caused by Covid-19 in as strong a position as possible.”
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