There has been a mixed response from the industry to the seven key housing measures announced in the Budget.
There is universal disappointment that the Chancellor has made no fundamental change to stamp duty levels.
Helping more buyers to enter at the lower end of the market would have resulted in more movement and transactions, freeing up stagnant property chains and bringing badly-needed housing onto the market says Simon Rubinsohn of RICS.
Paul Smith, chief executive of haart, is equally forthright, saying the Chancellor's missed opportunity is at best disappointing and at worst will perpetuate a dysfunctional housing market. Smith says Osborne has turned a blind eye and given nothing to the majority of homebuyers and sellers rather than throwing them a lifebelt.
Andrew Turner, head of residential at Smiths Gore, sees it like this: What we have is Peter being robbed to pay Peter - on the one hand purchasers receive very significant financial assistance from the Exchequer [Help To Buy]. On the other hand, the Government rakes in the Stamp Duty, which can run into many thousands, even on a very modest home.
The one change the Chancellor did announce about stamp duty - extending the 15 per cent level for corporate and off-shore buyers down from £2m-plus to £500,000-plus - may have an unexpected by-product to benefit the lettings industry, according to Savills.
This is because the annual charge levied on not occupying such properties, which goes hand-in-hand with the 15 per cent stamp duty, may oblige purchasers to rent them out instead of leaving them empty. This is a real incentive for overseas owners who might have used such an ownership vehicle to let out that property and contribute to London's need for more homes suggests Savills' Lucian Cook.
Otherwise the announcements of interest to the housing industry were mainly about the already-predicted extension of Help To Buy equity loans until 2020 and a new development bank created to help small and medium size developers enter the busy house-building sector - all broadly welcomed by all sectors of the industry.
Comments
Using the UK housing market as a cash cow now that it is buoyant again, is nothing less than an assault on home buyers and certainly not the politics of those purporting to help hard working people. The wider UK economy has been saved by the housing market yet is now being turned to as a rich uncle by Government. Fattening it up then bleeding it dry is an audacious move by George Osborne.
George Osborne delivered a budget today that seems to have largely ignored the housing market but in doing so, has penalised it.
The stand out injustice in todays ballot box announcements has to be STAMP DUTY.
Ignoring the amending of this tax on aspiration and not raising thresholds or equalising the levy percentage itself, has left house purchasers far worse off in real terms.
Whilst house prices rise again, the stamp duty collected rises whilst thresholds stay stubbornly static once again.
The Office of National Statistics now states that house price inflation will hit 9% in 2014. This assumption significantly hikes the amount received by the Treasury to such an extent that the ONS have revised their deficit forecast DOWNWARDS by 3.4 billion, largely due to these rising prices and higher transactional volumes.
http://cdn.budgetresponsibility.org.uk/37839-OBR-Cm-8820-accessible-web-v2.pdf
The upshot is that home buyers are to be penalised still further by a regressive and unfair tax that is increasing at the same time as those buyers are struggling to raise deposits and equity enough to move and, at the same time, face rising interest rates and greater mortgage costs into the bargain, as stated by the BoE Governor of late.