Earlier this week, Chancellor of the Exchequer, Phillip Hammond, delivered the autumn budget. This is the biggest day in the financial calendar, as plans for tax and spending changes over the next 12 months are announced.
Several of the pledges and details will directly impact buyers and those involved in the property market, particularly First Time Buyers and developers. We’ve detailed the relevant areas and how they may impact you below:
Stamp Duty Relief
You may recall back in last year’s budget, Mr Hammond announced the abolition of Stamp Duty on purchases up to £300,000 for First Time Buyers. Since then, over 121,500 buyers have benefited, with First Time Buyers now at an 11 year high. Given the seeming success of this action, he has now announced that this is to be extended to Shared Ownership properties on the first £300,000 of properties valued up to £500,000.
There are more than 200,000 Shared Ownership homes in the UK and this development will not only be effective immediately, but has also been applied retrospectively, so if you have purchased a Shared Ownership property since the 2017 autumn budget, you could be eligible for cashback.
To find out more about the details surrounding Stamp Duty for First Time Buyers, check out our blog from last year’s budget which goes into detail regarding eligibility, click here to read.
Help to Buy
Back in August, we delved into the success of Help to Buy, you can read more here, at that time, 420,000 buyers had benefited from the Help to Buy Equity Loan scheme, over 365,000 being First Time Buyers. The Help to Buy Equity Loan scheme remains one of the most successful, where buyers can receive a Government loan of up to 20%, requiring just a 5% deposit on new build homes.
It had been previously announced that the scheme, boosting home ownership for not only First Time Buyers but all prospective purchasers, would be extended to 2021. In this week’s budget, Phillip Hammond has confirmed that it will be extended by a further 2 years, taking us to 2023. There are, however, some caveats surrounding this extended time, as it will only be available to First Time Buyers and some regional price caps will be applied.
As it stands today, you can benefit from the Help to Buy Equity Loan if you are looking to purchase a new build property up to £600,000 with a developer who has registered for the scheme, some will have limited availability so it is always worth enquiring with the relevant sales office. Currently, it is not only First Time Buyers who can benefit, any home buyer could, providing they are not planning on part exchanging their property as part of the purchase and do not own any other property at that time (landlords, holiday homes etc).
More new homes
New home registrations in Britain have reached their highest level in more than a decade, boosted by a number of large developments in London, according to an industry body. The government’s target is 300,000 new homes a year by 2022, but the majority of housebuilders think it will be missed by at least 50,000. Phillip Hammond has targeted this issue with some further pledges for builders and councils.
The autumn budget has allocated a £655 million fund for councils in order to transform their High Streets, whilst this isn’t a direct impact on housing, part of this could be considered for conversion of commercial premises into housing, particularly interesting given the evolving nature of our High Streets today. Mr Hammond has also allocated £500 million for the Housing Infrastructure Fund; local councils can apply for this in order to build homes, it should help to build approximately 650,000. He has also allowed for funds to help up to 500 neighbourhoods allocate land for housing that they can then go on to sell to locals at discounted prices.
There has been some consideration for the developers directly, with £1 billion bank guarantees to aid SME builders.
Sources: Help To Buy South, Money Matters, Guardian, BBC