The Autumn budget is always an important date in the property calendar. This year was no exception and Philip Hammond’s speech contained plenty of changes to the property market, and in particular first-time buyers. In this post, we explore how the autumn budget will affect the property market.
We’ve taken a look through the changes and outlined you could be affected.
First-time buyers will no longer have to pay any stamp duty on properties costing under £300,000, to encourage them onto the property ladder, which could save them up to £5,000. The exemption applies to the first £300,000, on all properties with a sale price under £500,000.
For those who already own property, or have done in the past, the stamp duty will remain at 2% on properties worth more than £125,000 with staggered rates rising as the value of the property increases.
With average the average price of a first home in the Midlands at £165,000, this could be a saving of over £700. The figure rises to £5,000 for those homes worth over £400,000.
The initial costs are an influential factor in making the first step onto the property ladder so this could be good news. The changes are effective immediately so this is great news for those already in the process who have had their sale price agreed.
Nevertheless, it’s possible this will push prices higher until the issue of supply is also addressed.
According to Martin Broadbent, our Residential Sales Partner,
“The announcement today from the Government to abolish stamp duty for First Time Buyers will have a positive impact on the market. It’s a smart move to ensure the dream of homeownership for young people can become a reality and will help buyers across our region.
We do however need to realise that this move will increase the demand for first time buyer properties and if we don’t have the supply it will push prices up.
Alongside creating incentives to stimulate demand, the Chancellor also announced measures to increase supply, pledging to build 300,000 new homes a year by the middle of the next decade. The total investment will include £44bn of funding, loans and guarantees. This is a more robust commitment than the previous pledge of 1 million new homes by 2020.
Last year, there were 217,000 new homes built and this extra supply should also ease the pressure on the housing market.
“We welcome the Government’s plans to build 300,000 new homes a year, it is yet another pledge to increase the number of new homes created. It will be interesting to see how this pledge is delivered as historically the rollout does not mirror the initial announcement”
As well as building more homes, the Government has also taken measures to ensure that current land and property is being put to good use.
Local authorities will now be allowed to charge double council tax on empty homes. In addition, there will be a review of ‘land banking’, where planning permission has been granted but the plot sits empty whilst its value rises.
The focus will be on funding homes in city centres and transport links, as well as plans to fund 5 new garden towns between Oxford and Cambridge.
So what’s the Howkins’ verdict?
“All in all a good budget for our property industry”
We will be waiting to see how these plans develop.
If you’re a homeowner, landlord or a first-time buyer, get in touch with our property team to find out how these changes could affect you.