The Chancellor, George Osborne, has confirmed a number of measures in today’s Budget that will affect the property and housing market. These measures were set as part of what George Osborne described as an improving economy:
Currently a 15% stamp duty is applied to houses worth over £2 million and bought using offshore companies or through a “corporate envelope”. As of midnight tonight, this will now also apply to properties that cost over £500,000.
Help to Buy
George Osborne has confirmed that the initial part of the government’s Help to Buy scheme, Help to Buy equity loans, will continue running until 2020. These loans will help people who only have a 5% deposit buy a new property.
This part of the scheme was originally going to end in 2016, but Osborne has extended it now by four years to enable more people to get themselves onto the property ladder and to boost the UK’s construction industry.
So far approximately 15,000 people have bought homes using the Help to Buy equity loan in the first nine months, as it provides a loan of up to 20% of the property’s value, allowing buyers to fund the remaining costs using a deposit as small as 5%.
The Chancellor said that with the current rate of increase in house prices, there will be little risk of a housing bubble now or in the future as it would be 2018 before the average property prices reached their pre-downturn prices.
He said that the Bank of England’s Monetary Policy Committee would vigilantly monitor future housing prices, to ensure a housing bubble does not take place.
Right to Build
A new scheme is going to be launched called “Right to Build”, where £1.5 million of funding will be allocated to those who want to build their own property. This aims to encourage smaller construction projects that are led by a community.
15,000 new homes are going to be built in the area of Ebbsfleet, Kent, as part of a garden city development. This location was chosen due to its strong transport links and available land.
An additional 200,000 houses will be created by 2020, with a budget of £500 million being used to assist the smaller and medium sized house builders through a Builders Finance Fund.
The government is going to support apprenticeships by extending the grant for smaller businesses so that they can support 100,000 more apprenticeships, many of which may be directly related to the property industry.