Britain “is in a good place” for investment right now, says the boss of Winkworth Plc, which operates more than 100 estate agency offices around the UK including 60 in London – but “any optimism is tempered by the uncertainty being generated by the forthcoming Budget.”
Dominic Agace is urging the Chancellor to “avoid intervening in the UK economy” on 30th October, warning that proposed changes to inheritance and capital gains taxes “will slam the brakes on growth.” Speaking to top property commentator Anne Ashworth and Anthony Emmerson of mortgage brokerage Trinity Financial on his company’s latest podcast, Agace suggests the Government should instead focus on helping first time buyers with stamp duty and other incentives.
Dominic Agace, Chief Executive of Winkworth: “The post-election boost in the property market has been slightly undone by the vacuum waiting for October 30th and the over-messaging of gloom. However, interest rates have come down. We’ve seen the second highest growth among G7 countries, according to the OECD, and the picture is looking good for people in the main market. The UK is in a good place, and that gives it a great reason to invest in it.”
Emmerson agrees, noting “positivity tempered with a wait for clarity” and calling for Rachel Reeves to “have the guts to step up and support more first-time buyers coming into the market.”
Dominic Agace: “The first step has to be macro-stability and effectively not intervening too much in the UK economy. In prime London, wealthy high net individuals are deeply concerned.
Inheritance tax is the focus for the overseas investor who chose to move to London, having built their business and then to be told their family wealth will be taxed in the UK, it’s a step too far for many of them.
“Capital gains tax hikes are making landlords trade their long-held buy to let investment. We need to see investment in the court system if you remove no-fault evictions for those anti-social tenants so that landlords have a reasonable timeframe to address these challenges. Otherwise, why be a landlord?
“Replacing Help to Buy is really important to enable the building of the new homes that are needed. Stamp duty needs to be addressed. It stops people from buying homes to live in and it prevents landlords from buying properties to let out, which hinders social mobility.”
Anthony Emmerson, Director at mortgage brokerage Trinity Financial: “The mood has picked up to a more positive position but we are stuck as people wait for clarity. People are house hunting but aren’t yet committing.
The lending market is definitely doing its utmost to try and support first time buyers. We’ve had more lenders stepping up their affordability as the inflationary figures have come downwards. They’ve eased off their stress tests and allowed people to borrow that little bit more than they might have been able to borrow six months ago. And we’ve also got lenders doing first time buyer incentives, where they allow you to borrow five and a half times your income. That is particularly important in the London market, where the average cost of a house compared to the average income is so vast that we need every little bit of help we can to try and get these people to affordable the properties.
“At the moment in this market, we’ll secure you a rate today, the chances are that we’ll get you something better tomorrow or the week after. It’s a positive trend It’s a hell of a lot more work for us, but it’s a positive trend.” “The last time we had a stamp duty holiday and incentives for first time buyers up to certain levels, it was all taken very positively by the market. It created a lot of first time buyers to be able to enter the market without too many hurdles and requirements for much greater levels of deposits and cash to be able to pay these fees. I think it would be very well received.”
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