Chancellor Rishi Sunak has announced further plans to support UK citizens, businesses and the economy. While industries like hospitality could yet face further difficulties, the housing industry has been receiving continuous support. The stamp duty holiday and mortgage payment holidays have helped buyers and owners during this difficult time. This is how the Winter Economy Plan can benefit the housing market across the coming months.
The social and economic uncertainty associated with the pandemic has impacted the housing market. Those looking to buy, invest or move have naturally had doubts about whether now is the right time. The Winter Economy Plan aims to limit that uncertainty by keeping unemployment levels as low as possible and protecting job security.
As of 1st November, the current furlough scheme will be replaced by the Job Support Scheme. Employees will work at least a third of their hours, with their employers and the government covering the other two-thirds. The income support grant for self-employed workers will also be extended as well.
Mortgage lenders have been cautious, however, ensuring a robust labour market will benefit the housing sector. Additionally, the measures to maintain job security will benefit housing market workers. In order to keep the sector moving over winter, the likes of letting agents, contractors and mortgage lenders will be crucial. The Job Support Scheme can give the market the support it needs to push through these difficult times.
Landlords and Tenants Benefit
The extension of measures by the Chancellor will also benefit the private rental market, both for tenants and landlords. As the crisis developed throughout the year, more and more tenants requested that their landlords have lower rents or payment breaks. This was due to rises in potential job losses and unpredictable financial futures. However, the initial furlough scheme helped provide the market with stability.
The Job Support Scheme will be crucial in preventing sharp increases in job losses in October as the furlough scheme comes to an end. Maintaining financial and job security post-October will increase confidence in the private rental market. By limiting the number of rent arrears, the new measures will have benefits felt across all parties.
Chris Norris, Policy Director at the National Residential Landlords Association (NRLA), has submitted his support for the new subsidies. Norris states, “it is vital that the government now follows the example set in Wales and Scotland and develops interest-free, government guaranteed hardship loans to help tenants pay off rent arrears built as a result of the pandemic.”
He continues, “we cannot expect them, or landlords, the vast majority of whom are individuals without the means to absorb significant losses, to continue to struggle without support.”
The average UK house price growth for September hit 5%, the highest since September 2016, according to Nationwide. The latest figures represent another example of how the UK housing market has progressed despite the lockdown.
The stamp duty holiday has given the market the capacity to push through purchases. The demand for space has increased as more people have had the opportunities to assess their current living situations.
Demand hasn’t wavered, and the Job Support Scheme can sustain it. Subsidies and measures to protect the job market have meant that buyers are feeling more confident in pursuing purchases. Fears of a significant October drop-off have lessened and demand in the housing market looks to be sustained.