There was an admission from Chancellor Philip Hammond that the housing market in Britain needs repair. This isn’t a surprise to anyone who has been involved with the property market of late but in the Autumn Budget, there has been a range of measures introduced which will hopefully impact on the state of the market.
While there are many economic and political concerns that influence the property market, it is generally agreed that the biggest issue in the market today is a shortage of houses. According to recent figures, the supply of homes to the market is at a 10-year low and there have also been figures which state that fewer people than ever before are applying for mortgages.
The market needs assistance
There is a need to stimulate the property market. There will be debate and disagreement over the actions taking in the Budget, as there always is, but there is an acceptance that the slow-moving property market is an issue that must be improved on.
In the 2017 Autumn Budget, stamp duty was removed for first-time buyers purchasing a home up to the value of £300,000. It has been claimed that 121,500 households have benefitted from this change and the Chancellor said that the volume of first-time buyers in the UK is at the highest level for 11 years.
In 2018, there has been a further change in stamp duty. This will see stamp duty removed for all first-time buyers of a shared ownership property, up to the value of £500,000. A shared ownership property is when the buyer purchases between 25% and 75% of the property and then rents the rest of the home.
Will more people consider shared ownership now?
This scheme will be backdated to the Autumn Budget of 2017 so anyone who has purchased a home in this manner in the past 12 months will receive the benefit. In the United Kingdom, there are over 200,000 shared ownership properties; and this move may make this style of property ownership more attractive to buyers.
There were calls for stamp duty changes to be made in the Budget, but most of the focus fell on assisting downsizing in the market. There is a growing awareness of the benefits that could be achieved if people were encouraged to downsize their property. With an ageing population in the UK, assorted studies have indicated that there is a willingness to downsize but the cost of the process is a concern for many people. This problem wasn’t addressed in this budget, so it remains to be seen how this area of the market can be improved upon.
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