The Chancellor certainly didn’t disappoint in delivering his final “rabbit-from-the-hat” announcement, where he revealed new laws that would see 95% of first time buyers pay no stamp duty on their property purchases. In fact, there were a few things to report from the world of property as follows:
The zero rate of Stamp Duty Land Tax (SDLT) for a first time buyer applies to purchases of up to £300,000. For properties worth up to £500,000, SDLT will only be applied to the amount between £300,000 and £500,000. However, the zero rate is ‘lost’ on the first £300,000 if the price is over £500,000. Therefore, it is worth negotiating the price of the property – particularly where the thresholds are applied.
Build more homes
The shortage of homes, and indeed affordability, are frequent topics of discussion. Whilst there is no magic wand, there is significant pressure on the Government to address wide ranging issues associated with housing. The Treasury has published new reforms to increase housing supply and it includes plans to build 300,000 homes per year, on average, by the mid-2020s. The Autumn Budget made £15bn of funding available for this task, not just for the actual building of homes, but to ensure that the land is available for development.
Small house builders
The push to build more homes will be a welcome boost to SME housebuilders, who suffered during the recession as development dried up. There will be £44bn of capital funding, loans and guarantees, with £1.5bn for the Home Building Fund targeted specifically at SME housebuilders, who are crucial to turn around smaller sites for a faster build.
Homes for Londoners
The spotlight is on London as many people question how these changes will affect property ownership in London. Whilst some say that the scrapping of SDLT for first time buyers will significantly reduce costs, even for those purchasing property in London, others say that it will have little impact – and more will need to be done. Many people are now commuting long distances into the capital as they cannot afford to live nearby and the impact is felt by many businesses. Not only does this have an adverse impact on productivity but it also affects prospects for attracting new talent.
Assisting first time buyers with the latest SDLT measures could start to chip away at affordability issues, but we would need to see how this impacts on homeownership in the longer term. Changes to the planning system to assist with improving the supply of housing is also crucial.
If you have any questions relating to property, or you would like any more information relating to the Budget, contact DMH Stallard for more information.