Budget: No good news for property lenders
Chancellor Jeremy Hunt has been criticised by alternative lenders for failing to tackle the problems facing the UK’s property market in his Spring Budget.
While welcoming a ‘quiet Budget’, Shojin chief executive Jatin Ondhia said the government could have tackled issues including sky-high inflation in the construction sector and access to finance for developers.
“Prudence and stability were clearly right at the heart of Hunt’s Spring Budget. Undoubtedly, the hangover effect of his predecessor’s gargantuan economic gamble – and the corrective fiscal squeeze that followed – left little room for any wild cards,” said Ondhia.
“However, at a time when sky-high inflation is compounding the housing crisis, is no news really good news? Building costs are through the roof and access to finance remains a big issue for developers, in turn damaging efforts to boost the UK’s housing stock.”
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He also highlighted the instability at the heart of government, with the UK having six different MPs holding the role of housing minister in the space of a year
He said what Britain needed was some clear policies to kick-start building projects: “The lack of decisive action on planning reforms, construction output and the lack of affordable homes could be a dangerous oversight. Evidently, the private sector will have to forge ahead to ensure property development continues at pace.”
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Alan Fletcher, partnership director at peer-to-peer development lender Invest & Fund, agreed with Ondhia that there was little for the housebuilding sector in today’s fiscal statement.
“From our perspective as a P2P platform servicing residential development clients, there was no real mention of the housing markets or housing supply reform we are aware of,” he told Peer2Peer Finance News. “I imagine there will be some disappointment across the wider housing sector that these issues weren’t mentioned today.”
Meanwhile, Paresh Raja, chief executive of Market Financial Solutions, the bridging loan and buy-to-let specialist, reiterated the view that the chancellor should have tackled the pressing issues facing the industry.
“It’s no secret that there are issues requiring attention in the property sector, most notably where housebuilding activity, planning regulations and the national housing stock are concerned,” he said.
But he praised the Chancellor’s “prudent economic approach”, saying: “While there may not have been any noteworthy policies or investments relating specifically to property, his efforts to combat the cost-of-living crisis and bring much-needed stability to the economy should be welcomed.”
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He cited the “tumultuous the effects of the mini-Budget”, which fuelled significant interest rate changes and a great deal of uncertainty. “The property market will likely benefit from a sense of economic calm, particularly if inflation continues to fall and interest rate hikes come to an end,” he said.
