"Tax foreign buyers" - "build more homes" - "live within your means". Sounds good!
George Osborne has decided that “foreigners” should pay 28% capital gains tax when they sell properties they have purchased in the UK. We think most people will agree with that policy but it was also suggested that to ”kill the Golden Central London Goose” would end the ripples of prosperity from spreading out across the country from the capital. Therefore Mr Osborne’s announcement that £1 billion of loan money is to made available to councils wishing to fund new housing developments expected to create 250,000 homes, was warmly welcomed. This on top of news that house building is up 29% from last year, which is good for constructions firms, although many large financial companies such as Legal & General, suggest that house building should be a much higher and more urgent priority.
This increase has almost certainly been kick started by the Governments “Help to Buy” (HTB initiative). Not only did Mr Osborne not respond to fears that HTB might overheat the market, he welcomed an additional number of banks into the HTB funding family, pointing out that ”it’s not enough to build more houses, if families can’t afford the deposit”. The National Association of Estate Agents (NAEA) supported this by declaring that “help to buy” was leading not to a housing bubble, but to market buoyancy. The Chancellor also used his autumn statement to warn against not “living within our means” and said that lower mortgage rates had been hard won but could easily be lost.
There was also disappointment expressed by estate agents because the Chancellor had not scrapped stamp duty on lower priced houses below the £500,000 and even the £250,000 threshold. This will certainly remain the aim of the “anti stamp duty lobby”, ourselves included.
The National Association of Estate Agents (NAEA) also stated that owning a home is still out of reach for many people as wages struggle to keep pace with prices. “It remains a fact that first time buyers will still make up less than a quarter of all property purchases”. Among the predictions for the coming year, is a suggestion that the “buy to let” market will improve and become strong again. Also, that house prices will increase across the country. However, these are only predictions which are numerous at this time of year. As always, much will depend on the economy, interest rates and the amount of money banks and building societies are willing to lend.