This afternoon, Lisney chartered surveyors made several observations on Budget 2021 in relation to the property market. In particular, Lisney welcomed the fact that the help-to-buy scheme at its current increased level will be extended; the increases in housing expenditure; extension of the development land rebate scheme; and measures to assist the hospitality sector.

Help-to-Buy Scheme

Lisney strongly supports the decision to keep the extended help-to-buy scheme for first-time-buyers until the end of 2021.

According to Aoife Brennan, Director of Research, Lisney:

“The help-to-buy scheme has been very successful in recent years and the government’s commitment to keep it in the extended format (i.e. maximum rate of €30,000 rather than €20,000) until the end of next year is very positive for the market.  It will assist in providing certainty to developers in terms of purchaser demand and means that they will continue to build homes and address supply issues.  For first-time-buyers, it will allow them to get on the property ladder sooner and take many of them out of the rental market quicker, hence assisting the supply pressures that are in that part of the market.”

Investment in Housing

According to David Byrne, Managing Director of Lisney:

“Additional support for social housing is critical for the overall functioning of the residential market.  We welcome the fact that €3.3bn is available for this purpose next year.  We note that funding will be made available for the delivery of 2,450 new social homes through long-term leasing by local authorities and approved housing bodies, which is positive.  There has been a growing interest from developers and investors to provide housing schemes for this purpose in recent years.  There are advantages for all parties in such arrangements.  For local authorities, the key advantages are speed and delivery of units.  For developers, if agreements can be reached before construction begins, their risk is reduced and they could potentially benefit from cheaper funding as the end purchaser is effectively the government. 

Also positive for housing is the allocation of monies towards affordability measures including the Services Sites Fund, the Local Infrastructure Housing Activation Fund and support for the Land Development Agency.  Services can be an issue with certain site development so the allocation of €1.4bn to water and wastewater services is critical for future development”.

Licensed & Leisure Industry

The temporary reduction of VAT to 9% in the hospitality sector is very welcome, as is the COVID Restrictions Support Scheme (CRSS).

According to Tony Morrissey, Director of Lisney and Head of the Licensed & Leisure Division:

“The previous reduction in the VAT rate in hospitality and tourism was widely acknowledged in assisting the sector to return to growth and as such, this temporary reduction is very welcome.  Licensed premises that rely significantly on food sales to generate large parts of their turnover or even those that rely on food to boost drink sales, will benefit from this, particularly in the context of COVID-19.

The CRSS is aimed at businesses that have either been prohibited from opening or have been trading at significantly reduced levels due to the restrictions imposed on them.  Pubs and restaurants are key examples and they have been seeking such an intervention since March.  The weekly payment (to a maximum of €5,000) will be viewed positively by the industry and along with the EWSS will go some way towards alleviating the financial hardship experienced.  Depending on how the situation evolves, it may be the case that extensions to the CRSS will be required post March 2021.

Stamp Duty Residential Development Refund Scheme

The scheme, due to expire in December 2021, will be extended to operations commenced by 31^st December 2022.

According to Cathal Daughton, Director of Lisney:

“This scheme provides a partial refund (4% of purchase price) of stamp duty paid on the acquisition of development land that is subsequently developed for residential purposes.  While its extension is positive, practically it may be more beneficial to apply a fixed stamp duty rate to residentially zoned land.”