The Autumn Budget for 2024 included a stamp duty increase on second homes, rises in employers’ NI, and a capital gains tax hike, among other elements. In the run-up to this year’s Budget, the market has been on tenterhooks: Zoopla’s HPI points to cautious homebuyers while rumours of potential tax rises swirl.
Ben Barbanel, chief lending officer at OakNorth, suggested that regulation should be an essential area of address for the government.

“For too long, much of the policy and regulation shaping our industry has been driven by risk aversion rather than growth ambition,” said Ben.

“If this government follows through on its commitment to partnership with business, we could see a more proportionate, evidence-based approach to regulation that empowers entrepreneurs.”

In particular, Ben called for proportionate regulation for smaller and mid-tier banks in order to better reflect the risks of SME and property lending. He described a current “one-size-fits-all” approach, which he believed held some lenders to disproportionately high levels of capital and prevented them deploying funds into the economy.

Alongside support for growth and productivity sectors — including social housing, healthcare, education, and regional regeneration — Ben also believed the government should encourage entrepreneurship and investment through policies that simplified funding and rewarded investments.

For him, the efficacy of the coming Budget hinges on a few key areas: “It will depend on the balance the Chancellor strikes between fiscal discipline and growth stimulus.

“If the Budget includes measures that improve confidence among growth businesses — such as tax stability, investment incentives, or planning reform — we could see an uptick in borrowing appetite and transaction flow.

“That said, access to finance isn’t the main constraint right now; confidence is. Many entrepreneurs have strong balance sheets and ambitious plans, but uncertainty around regulation, tax, and demand has kept investment muted.”

Nick Baker, CCO at Allica Bank, said the government’s main focus in the coming Budget needed to be on SMEs.

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“The government’s priority has to be on driving investment and economic activity, with a particular focus on the real economy of small and medium businesses across the UK.”

Nick cited the Growth Guarantee Scheme, a system operated by the British Business Bank, through which lenders were provided with 70% government guarantees on SME loans. He saw this as a tried-and-tested way of unlocking investment.

“At the November Budget, Allica would like to see the Chancellor commit to doubling the capacity of the Growth Guarantee Scheme in 2026 from £1.2bn a year to £2.4bn, and set a target to grow this to £5bn annually over the next five years.”

Nick noted a piece of Allica research which highlighted that, as a share of GDP, the UK scheme was much smaller than equivalent schemes in the US, Germany, France, and Spain.

He added: “Importantly, this can be done on a fiscally neutral basis by replacing the current 1.5% guarantee fee with risk-tiered pricing. That means lower fees for well-secured lending, and higher fees for productive but riskier lending where market failure is most acute.

“As the UK searches for growth, expanding the Growth Guarantee Scheme is a rare opportunity, requiring no new institutions and no complex legislation — just political will and Treasury support.”

Paresh Raja, CEO at Market Financial Solutions, stated that Labour’s time in power had been bumpy, with recent frustrations at a lack of clear direction. He added that the current level of uncertainty was restricting progress and growth.

However, Paresh also noted that the demand for housing remained strong, with the property market remaining resilient and moving forward despite some short-term tremors.

“With that in mind, the most positive impact Labour can make is to be crystal clear about what changes it wants to make, giving plenty of detail about how and when it will make those changes. It sounds simple, but clarity and certainty are essential if stakeholders from across the property market are to be able to plan effectively and act with confidence.

“So far, Labour has not been able to deliver that clarity and certainty. Back-tracking on past promises, such as the suggestion that the 2024 Autumn Budget would be the only time in this five-year parliament that taxes would need to be hiked significantly, erodes trust, and it is time for Labour to rebuild it.”