When Jeremy Hunt sat down in the Commons after delivering his first Spring Budget, I imagine there were many who felt more than a tinge of disappointment.
After all, industry commentators had been calling for help for the housing market – myself included. Where were the tax breaks to help keep landlords operating in the private rental sector? Where was the subsidy to help with energy efficiency improvements? Where were the cuts in Stamp Duty to keep house sales buoyant?
Despite the pre-Budget cries for help, Mr Hunt’s cupboard appeared to be bare for our industry. Indeed, the following morning, some of those same commentators took to the press to express their ‘disappointment’ about ‘missed opportunities’.
But is that really a fair description of the Chancellor’s financial plan?
He didn’t listen to the calls for supportive interventions, but he didn’t do anything intentionally punitive, either - and after a year of political and economic turmoil, stability is a good start.
A steady hand on the tiller
As I’ve said, this was Mr Hunt’s first Spring Budget, but it wasn’t his first financial statement to the House. Last year, just days after his appointment as Chancellor of the Exchequer he had to deliver an Autumn statement to reassure the market after Kwasi Kwarteng’s ‘mini-Budget’ of 23rd September, 2022.
Included in Kwarteng’s growth plan was £45bn of unfunded tax cuts at a time of already high government spending and borrowing. And the reaction from the market was the pound plummeting against the dollar, pensions at risk of collapsing and thousands of mortgage products hurriedly removed from the shelves.
It’s difficult to believe that that was just six months ago.
And what has happened since? New Prime Minister Rishi Sunak has kept Mr Hunt as his Chancellor, sterling has stabilised, mortgage products have returned to the shelves and rates have fallen to more manageable levels.
Where some had predicted a crash in house prices for 2023, the first quarter has seen the sector show remarkable resilience. In fact, as figures just released by property expert, Chris Watkin, demonstrate, last week was the best week for house sales since that mini-Budget - the number of homes sold subject to contract (STC) was 23,417, the highest since September 2022. And as we all know, demand for rental properties is fierce.
So even if business is not exactly booming, it’s definitely humming along better than any of us could have imagined last Autumn.
So, what has brought about this reversal in fortunes? Stability. An absence of radical solutions which can take people (and markets) by surprise and send shockwaves through the economy.
Consider for a moment what Mr Hunt announced in his speech: unemployment sits at just 3.7%, from a high of 10.7% last November, inflation is due to be as low as 2.9% by the end of the year and job vacancies are high at over 1 million.
The Chancellor is winning his battle against inflation and that’s the most important thing. Stable prices support economic growth and employment. And it allows people to make plans – not sit on their hands wondering what’s going to happen next.
That is good for the housing market which will be good for the rental market in the longer term.
Jeremy Hunt is becoming known as the steady-as-she-goes Chancellor and we shouldn’t underestimate the value of stability. We’ve had enough excitement to last a lifetime.