What Does the Autumn Statement Mean for Housing?
Lisa Gibbs, Partner and Head of Residential Conveyancing at Simpson Millar, looks at the key points on housing and property announced during Chancellor George Osborne's Autumn Statement.
Osborne Closes in on Generation Rent
The Chancellor's Autumn Statement continued with the clear message that the government wants more people able to buy their own homes
Greater property availability and opportunities to buy could be seen by the announcements. Osborne has pledged to:
- Lift the restrictions on shared ownership and reform the planning system
- Offer a new help to buy scheme in London providing an interest free loan worth up to 40% of the value of the home
- Build 400,000 affordable homes, half of which will be starter homes
- Start a pilot scheme with housing associations allowing tenants to buy their homes
There will also be changes to stamp duty from April 2016 introducing a 3% surcharge on all buy-to-let properties and second homes
The extra 3% will see the stamp duty paid on a property worth £175,000 rise massively from £1,000 to £6,250. Whilst this may cut down on investment in rented properties and lower house prices, it could just see these increased costs filtered down to tenants. It's likely that we could now also see a rush to complete on buy to let properties before these changes come into force next April.
The Housing Crisis and Homelessness
Whilst the Government has pledged to give an extra £10 million to councils to help homeless people, Osborne's continued focus on home ownership has received criticism.
Former housing association CEO, Tom Murtha, speaking with the Guardian (Nov 25th), criticises the decision to subsidise homes for sale and not social rented homes:"The government have sacrificed social housing, the only truly affordable homes for those on low incomes, to subsidise home ownership initiatives which will not be affordable to most."
Anticipated Business Rate Announcement Falls Flat
The government has failed to deliver its promise to reform business rates (charges on non-domestic properties
) by the end of the year, instead choosing to extend the existing rate relief for 600,000 small businesses. Whilst this is good news for small business owners, it could see medium sized businesses struggle due to costs of the new living wage, along with the apprenticeship levy.
This came with the announcement that local councils will now collect this tax and will have the devolved authority to control rates. It will be interesting to see whether councils will step up to reduce the rates for struggling businesses, or if they'll be bound by budget restrictions.
Simpson Millar's Conveyancing Department
The impact of these changes is yet to be seen: will they make a noticeable impact in supporting those currently struggling to buy? Will tenants begin to foot the stamp duty bill? Will the luxury property market suffer?Our Conveyancing team keeps up to date with the current policy changes that directly impact the clients we support with buying or selling property. Whether you're a first time buyer confused by the new process ahead of you, or looking to purchase a second home, or even a buy-to-let, our solicitors can give you the straightforward advice you need.