What does the Autumn Budget mean for the property market?
Chancellor Philip Hammond delivered the Autumn 2017 Budget yesterday by announcing a package of measures designed to boost the economy, with a particular focus on the property market. Hammond said that he wanted the UK to be a country ‘where the dream of home ownership is a reality for all generations’. This was good news, particularly for those looking to purchase their first home as Stamp Duty and Land Tax (SDLT) was abolished for first-time buyers on properties up to £300k or, in higher priced areas like London, on the first £300k of properties up to £500k.
The new measures will mean £5000 worth of savings for those who purchase homes worth £300,000 and is likely to mean that 80% of all first-time buyers are exempt from paying stamp duty. These changes are designed to encourage greater movement in the property market by enabling people to more easily get onto the first rung of the property ladder. It is hoped that this change will encourage property sales as there is likely to be an increase in demand for properties that are suitable for first-time buyers, and so growth will be stimulated higher up the ladder.
Jamie Hynes, Director of Seymour Dorking comments, ‘now is the time to move! It is important that first-time buyers act quickly to take advantage of the momentum created by these changes. Similarly, owners of properties that are suitable for first-time buyers should think about coming to market if they are looking to upsize.’ In a further effort to bolster the position of those looking to purchase their first home, Hammond promised another £10 billion would be channeled into Help to Buy schemes, which is set to assist in the funding of around 135,000 more homes for new owners.
Turning to the issue of the need for an increase in house building to meet the surge in demand, Hammond stated that over the next five years, £44 billion will be committed to boost the housing market which should ensure that approximately 300,000 new homes are being built each year. Is it all good news? As Hammond noted himself, ‘[the housing crisis] is a complex issue and there is no silver bullet’. Some experts believe that the abolishment of the SDLT for first-time buyers will simply increase house prices in areas where there is an undersupply of housing, and where house prices are therefore already at a record high. This situation is likely to continue until there is an adequate supply of new homes and second-hand stock on the market to ease the pressures. These recent developments go some way towards addressing the housing crisis by attempting to stimulate the market. It is certainly good news for first-time buyers but there is still more that needsto be done if the country is to realise the dream of home ownership for all generations.