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Bargate Homes pre-budget thoughts

Will the Property Market be Hunting for Good News in the Spring Budget? – by Mark White, md of Bargate Homes.
Mark White, md of Bargate Homes at St Thomas' Mead

Mark White, Managing Director for Hampshire-based housebuilder Bargate Homes, said: “With a General Election expected before the end of this year, Jeremy Hunt will be delivering one of the most eagerly-anticipated Spring Budgets in recent times on Wednesday.

“As the UK climbs out of a technical recession, the Treasury surplus for the key month of January was reportedly smaller than analysts had predicted. We have been repeatedly warned that Hunt wont have much to give away. Will it be enough to see welcome changes to income tax thresholds and put a halt to years of fiscal drag? This would provide an overall feel-good factor the current government is seeking, ahead of announcing the date of the Election.

“What we already know is the anticipated extension of the freeze on fuel duty and the 12.3% fall in the Energy Price Cap from April will both play a significant role in lowering inflation. With the Bank of England’s Monetary Policy Committee next meeting on 21st March, and again in May, how soon can we expect a rate cut?

“Honing in on our industry, there are a range of measures the Chancellor could take that would make a real difference to the housing market, especially the crucial first rung. The prospect of 99% mortgages is not without its critics, but as long as the interest rate is set at an affordable – rather than a premium – level, it could certainly be beneficial to help renters to access the housing ladder with a minimal deposit.

“However, Hunt can’t afford to simply tickle us with this Budget. It needs to make us belly laugh, enhance our lives, and generate immediate positive action within the market. The best way to achieve this would be to implement a new version of Help to Buy. After nearly 10 years of successfully enabling hard-working people to move into energy-efficient new homes, it was madness to cancel such a popular initiative during a widespread cost of living crisis. Especially when Help to Buy did not cost the taxpayer – it generated a surplus!”

“We took a look at our own numbers for the past 12 months, where only 8% of 230 Bargate homes have been sold to first time buyers. This is a staggering 50% reduction. Meanwhile, rents continue to go up disproportionately to inflation, which continues to make it harder for people to save for a deposit, and yet, with no Help to Buy, typical mortgage deposit requirements are higher than they have been for well over a decade. It is very unhealthy that the number of new homes being built is half what it should be and thousands of would be first time buyers can’t get a foot on the ladder.

“What could be a popular win-win is if Hunt introduced a meaningful – Government subsidised – discount for those taking up Green Mortgages for homes rated EPC-A or B. This would increase footfall and sales activity at gas-free developments where housebuilders are already implementing the Future Homes Standard, and could deliver significant savings to new homebuyers.

“The Chancellor could also demonstrate a commitment to net zero targets by offering a Stamp Duty rebate for homeowners who retrofit eco technology into their homes. Similarly, feed-in tariffs should be reintroduced for homeowners with solar panels, to reward people for supplying renewable energy back to the grid.

“If housebuilders could build more homes, the whole industry would be able to generate significantly more tax revenue. However, the planning and environmental policy changes are achieving the total opposite. Furthermore, the significant additional costs housebuilders now encounter need to be passed onto the consumer for them to remain in business.

“For this government to stay in power, it must get serious about tackling planning obstacles – not just for urban brownfield sites – and promoting housebuilding. It is such a huge and vital industry that supports the wider economy, and the lack of appropriate, sustainable, and affordable housing has become a heated and divisive political issue.”

Bargate Homes is a wholly owned subsidiary of VIVID – Hampshire’s largest provider of affordable homes. Established in 2006, the company builds select developments in prime locations across Hampshire, Dorset, and West Sussex. Bargate Homes is currently delivering 900 homes across six live developments and has a pipeline of future sites expected to deliver in excess of 2,500 new homes.

 

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