There are still some weeks to go until the Budget on 30 October, close to four months since Labour won the General election and formed the new government.
To say this is a long time to wait would be an understatement, and also to point out that this has been a major mis-step would also probably be clear to almost everyone reading this and waiting for that first Budget.
It strikes us as somewhat odd that a party that pretty much got its campaign for election spot on should be getting it so wrong on the timing of this showpiece event, especially given its importance.
How much better would it have been to have held an emergency Budget at their earliest convenience, setting out the major threads of policy, rather than letting things drag on for so long?
Too much time to speculate and worry
In our view, by delaying the Budget until the end of October, the government has effectively left a huge void to be filled not just by speculation but by its own hugely negative messaging.
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Talk of £19bn blackholes has, unsurprisingly, left consumers and businesses wondering how Rachel Reeves intends to fill this, which in itself has left a stasis that cannot be filled until we know what her plans actually are.
Recently, we’ve talked to a number of estate agents about how this is all impacting the property market.
They’ve explained they are showing plenty of prospective purchasers around properties – viewings are up – but no decisions are being made as they are all “waiting to hear how the Budget is going to impact them,” and will only make a decision when that information becomes clear.
That being the case, we must wait another four weeks for certainty. Unless of course – and this actually sounds like a very good idea – the government embarks on a period of active leaking of almost everything they plan to announce in the Budget.
It would certainly be preferable to not knowing and people undoubtedly fearing the worst of what is likely to befall them, what it means to their finances, and within our sector, what this means for their intentions, certainly in the sale and purchase arena.
Not enough certainty from the government
The Labour Party Conference just closed and there is clearly a little detail slowly emerging about what ‘might’ be in the Budget, but for the most part, it’s a case of more generalisations, more talk of ‘trade-offs’ and more talk of ‘difficult decisions’, which quite frankly, will only slow down the market even further.
In the buy-to-let (BTL) space, there have been a lot of suggestions that landlords have been trying to sell up before a perceived capital gains tax (CGT) hike in line with income tax, but even if some have been able to make these sales in recent weeks, the clock has ticked forward to a point where any chance of a sale before the 30 October is almost impossible.
And, of course, this is a decision based on mere speculation. We do not know whether that CGT hike is being brought in, and again it seems odd to be basing decisions on what might happen, rather than waiting to hear exactly what will happen.
Who can blame consumers, or indeed any business, for putting such decisions on hold?
We are constantly told that markets abhor uncertainty, and for a Chancellor who has worked at the Bank of England, is an economist, and purports to understand these matters, to let the grass grow under her Budget feet seems like a huge error of judgement, for which our sector in particular is going to suffer for another month-plus at least.
No wonder we are seeing a raft of further rate-cutting from lenders to generate demand and interest. Left to its own devices, there is a real danger that property activity would grind to a half over the course of the next month.
For Reeves and Starmer, they might wish to utilise whoever has been so keen to talk about Sue Gray’s pay recently, in a Budget-leaking capacity – we could all do with the news sooner rather than later.
