Now that the dust has settled on Chancellor George Osborne’s March 2014 Budget, what was in it that affected the housing market?
Here are the pluses and minuses for homeowners and those hoping to get on the housing ladder, as well as people simply concerned about house prices and the number of new homes being built in the UK.
- Original Help to Buy scheme extended
Osborne announced that the Help to Buy scheme would be extended to 2020. The Government-backed scheme provides a loan for up to 20% of a property’s value at preferential rates. The buyer then provides the rest in the form of a deposit of at least 5%, and a mortgage.
The scheme was originally intended to end in 2016. The Chancellor stated he believed an extra 120,000 homes would be built because of it.
- No extension of the Help to Buy 2 scheme
The second Help to Buy scheme, in which mortgage guarantees are used to help buyers purchase any home, new-build or old, worth up to £600,000, wasn’t extended beyond its current due finish date of 2016.
- New garden city and building developments
The Chancellor announced the building of a new city in Ebbsfleet in Kent, which will include 15,000 new homes. Strong transport links to London and the availability of land ripe for development were cited as the main reasons for the site being chosen.
Further regeneration was earmarked for Brent Cross and there will be a major housing development at Barking Riverside in Greater London.
- Right to build scheme
A ‘right to build’ scheme designed to help those wanting to build their own homes was announced, with £150million of funding allocated. It’s expected to provide for up to 10,000 plots.
- £500million for small building firms
£500million was earmarked in the Budget for a Builders Finance Fund which will provide loans to small and medium-sized building firms. Many such firms currently have difficulty accessing finance due to banks reigning in their lending and it’s hoped this will add further impetus to home building in the country.
- Regeneration funds
Some of the ‘worst-conditioned’ housing estates in the country should be helped by the establishment of a £150million fund. Private sector developers will be invited to bid for loans from the fund and they’ll then work with local authorities to develop run-down housing estates.
- Increase in residential tax for private companies
Companies currently pay a 15% stamp duty charge on homes purchased for more than £2million. However, the Budget increased the duty to apply to all homes bought for more than £500,000. It’s seen as a way of closing a tax loophole which benefitted wealthy individuals buying homes through private companies.
Food for thought
So all in all, there was a fair amount of property-related initiatives and legislation announced in the Budget.
Depending on your political colours, you will probably think the measures are either reasonably encouraging for the housing market, or not enough by a long way to help solve the on-going problems of a lack of affordable housing and housing for the poorer sections of society.
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