Spring Statement 2018: The figures
Often some of the most interesting data which is released by the Office for Budget Responsibility (OBR) around the time of the Budget and Spring Statement can be found in the policy costings and economic forecasts.
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Among other things, this gives a good guide as to the government’s views on the future direction of the UK housing market. Compared to the guidance issued in November, the OBR has made a number of revisions to its March forecasts, to both future house price growth and tax receipts from residential stamp duty.
Looking first at house prices, the OBR expects values will end 2018 up by 3.7% annually – up slightly from November’s forecast of 3.1% - before easing to 2.7% in 2019 and to 2.2% the following year, down from 3% and 2.9% respectively.
Stamp Duty
Stamp duty is expected to continue to be an important and growing revenue raiser for the Treasury, even in spite of the recent moderation in sales volumes, and the abolition of stamp duty for the majority of first-time buyers in November’s budget. However, compared with the guidance issued at that time, the OBR has made a number of revisions to its forecasts, as shown in the chart below.
Stamp Duty Land Tax (SDLT) from residential properties is forecast to raise £9.5 billion in 2017-18, rising to £11.2 billion by 2022-23. Revenue from second homes and buy-to-let purchases is expected to contribute £2.2 billion by 2022-23.
Net additional dwellings
For the first time, the OBR has also included its forecasts for future net additions to housing stock. This figure tracks changes in the size of dwelling stock taking into account new builds, conversions, changes of use as well as demolitions.
The OBR estimates will be 258,000 new dwellings will be completed in 2017-18, falling back to 239,000 by 2022-23. While improved on the current figure, it falls some way short of the government's target of 300,000 additional properties each year.
