Following the first Autumn Budget given by Chancellor of the Exchequer Philip Hammond on 22nd November 2017, Winkworth sets out some of the major announcements made and how they are likely to affect the property sector...
First-time buyers will now be permanently exempt from paying stamp duty on all properties costing £300,000 and under in a bid to encourage more people onto the property ladder. The relief applies to purchases of property worth up to £500,000 under the new rules, but buyers will only be exempt from paying stamp duty on the first £300,000.
For those first-time buyers in London, this could as much as halve the amount of stamp duty they pay – the average first-time buyer property in London is currently worth £410,000, and buyers will now pay a £5,500 stamp duty bill compared with £10,500 under the previous rules.
As has been widely reported, the costs associated with buying a home are a major factor in the decision to take the first steps onto the property ladder, so this measure should be welcome news for those aspirational homeowners both in and out of London, and demonstrates the Government’s commitment to helping more people own their own home.
The Government has pledged to build 300,000 new homes a year by the mid-2020s, a step up from its original pledge of 1m new homes by 2020. 2016/17 is the first year where the Government has achieved its annual target by building over 217,000 new homes and this extra supply should help to increase housing stock levels over the next few years.
The Government has promised to provide £44bn of capital funding, loans and guarantees towards house building over the next five years. This follows a number of other promises to help boost the property sector in recent years, plus the housing white paper earlier this year which pledged to ‘fix our broken housing market’. Of course, this is another positive step for the property sector and should provide many of the incentives needed to increase the supply of new homes for UK residents.
Some of the other incentives included in this fund are:
- - A review of the gap between the number of planning permissions granted and the number of housing starts, with a report to be ready by spring 2018. This will look into issues such as land banking, speculators hoarding land and local authorities blocking development.
- - Funding for homes to be built in city centres and around transport hubs, where demand is at its highest.
- - Funding to create five new garden towns.
- - Help to develop more new homes on smaller plots of land.
Local authorities will have the power to charge a 100% council tax premium on empty properties, which could encourage those with empty property to sell or let, providing better use of the property available and more stock for the housing market.
If you’d like to understand more about how any of this might affect you and your future move, please don’t hesitate to contact your local Winkworth agent who would be happy to provide guidance and talk through the best options for you.