Autumn Statement: Winners and losers of the property market

Following the chancellor’s announcement in the Autumn Statement which saw him confirm that he’s doubling the housing budget to £2bn a year to deliver 400,000 affordable new homes by 2020.

Rob Stoyle, owner of Devon based estate agency, Helmores, says: “Basically it’s great news for first time buyers.  Firstly, the government are making about 200,000 new properties available through the Starter Home Scheme where first-time buyers will get 20% off the price”.   Rob continues “In addition, 135,000 properties will be made available through the Help To Buy scheme, which is great news for first time buyers who are struggling to save for a deposit”.

The Autumn Statement also contained some pitfalls for investment property buyers: Rob added; “Buy-to-let landlords and people buying second homes from the 1st April 2016 will have to pay more in stamp duty; a 3% surcharge on each band”.  “So if you in the market  for this type of property it would make a lot of sense to complete the transaction before then to avoid these additional taxes”.

George Osborne said the new surcharge, taking effect in 2016, would raise £1bn extra for the Treasury by 2021 but some landlords have said it would “choke off” investment in rented properties.

Buy-to-let landlords will also be hit by a change to Capital Gains Tax (CGT) rules. From April 2019, they will have to pay any CGT due within 30 days of selling a property, rather than waiting till the end of the tax year, as at present. Landlords are already due to get a lower rate of tax relief on mortgage payments.

Wiiners & losers-1Responding to the latest changes, Richard Lambert, chief executive of the National Landlords Association said: “The chancellor’s political intention is crystal clear; he wants to choke off future investment in private properties to rent. If it’s the chancellor’s intention to completely eradicate buy-to-let in the UK then it’s a mystery to us why he doesn’t just come out and say so”.

The government will put an extra £6.9bn into housing, including an extra £2.3bn in loans for the government’s starter homes programme, and £4bn lent to housing associations and local authorities to build more homes for shared ownership.

Another £200m will be used to build homes for rent, which will allow tenants to save for a deposit.

There will also be a pilot scheme to trial the government’s Right to Buy programme for housing association tenants.