What does the Autumn Statement mean for the property market?

Capital Gains Tax to be introduced for non-residents who sell residential property in the UK

Chancellor George Osborne's Autumn Statement today to MPs included a number of plans for the property market.

He announced that around £1bn in loans will be made available to help housing developments in various sites around the country including Manchester and Leeds. Councils will also sell off the most expensive social housing in a bid to house more families, as well as regenerate rundown estates.

Most property commentators focused on the Capital Gains Tax move which will be imposed on any gains made by non-residents who sell their residential property in the UK.

Liam Bailey, Head of Knight Frank Global Research, said:"Tax is not the primary driver for the majority of international buyers of residential property in London. We anticipate that the removal of the CGT exemption for non-resident purchasers will have only a marginal impact on demand and pricing. It is important to note that the change to CGT rules brings the UK in line with other key investor markets, such as New York and Paris."

Mark Harris, chief executive of mortgage broker SPF Private Clients, added: "We await more clarity as to whether this will affect non-residents who have owned property in the UK for many years. The introduction of such a tax will affect people's decisions on whether they sell or not, and may persuade homeowners to hold onto their properties for longer, applying the brakes to the upper end of the property market."

Fionnuala Earley, Research Director at Hamptons International, said: "The Chancellor is keen to be seen to be doing something to cool rapid house price growth in London and increasing tax on foreign buyers looks like a vote winner but in reality the proportion of foreign buyers is a lot smaller than one might think. Our data shows that 70 per cent of buyers in London are British nationals with the majority of the remainder being resident in the UK. Over the course of this year, the proportion of sales to foreign buyers has been decreasing, as the mainstream market recovers.

"Inevitably any announcement on property tax will cause some ripples in the market for residential investment, but in reality it’s unlikely to have much effect on the wider market.  We already expect the prime London market, which is characterised most by foreign wealth, to cool."

Commenting on the impact on mortgages of the announcement on the raising of the retirement age for those aged 49 or younger,, Adrian Anderson, director of mortgage broker Anderson Harris, said: "While the pension age has been steadily rising for a while, lenders are well behind the curve. Most will simply not lend past retirement age, which they take to be 65, yet the reality is that most of us will be working for far longer than that. Lenders need to address their policies now, as most of them are already outdated, and ensure lending to a maximum age of 70 as an absolute minimum."

Simon Rubinsohn, RICS Chief Economist said: "As we’ve been saying for a long time, the lack of housing supply is crippling the property market. If Help to Buy is to remain, Right to Buy extended, and expensive social housing sold off then the Government’s commitment to building houses simply must be extended.

"The £1bn of loans to unblock housing development across the country will contribute towards housing need and will drive construction jobs. However, we still believe housing is not at the centre of a coordinated property-led growth that supports a balanced regional recovery where all can access the market. The increase in the local authority borrowing cap will only make a very minor dent in the housing deficit.

“It was also disappointing to see long overdue changes to stamp duty have been ignored, particularly as the amount of revenue generated from this is rising sharply. The government plans to collect more than £60bn over the next five years in stamp duty receipts from British householders. Moving away from stamp duty brackets to a marginal system would be a boost to those struggling with the cost of living and help boost the number of property transactions. This will remove the so-called ‘dead zone’ created by the previous structure which saw a dearth of properties on the market between £250,000 and £270,000."

David Newnes, director of LSL Property Services, owners of the largest lettings agency in the UK, said: "The pledge of £1bn of loans to unlock large housing developments is certainly a welcome move and plans to increase local authorities’ housing revenue account borrowing limits are encouraging measures, both will play a part in boosting house supply, whilst at the same time preventing house prices from rising out of reach of buyers.

"Equal focus on expanding the 'right to buy’ offer and the Government’s investment into affordable housing shows efforts are being made. The government must continue to lend a helping hand to aspiring buyers, so that they can achieve their dream of home ownership, while emphasising the need for more homes to support a healthy rate of recovery for the market as we move into 2014."

 

Discover more property articles at Homes and Property
PROMOTED VIDEO
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Austen Lloyd: Private Client Solicitor - Oxford

Excellent Salary : Austen Lloyd: OXFORD - REGIONAL FIRM - An excellent opportu...

Austen Lloyd: Clinical Negligence Associate / Partner - Bristol

Super Package: Austen Lloyd: BRISTOL - SENIOR CLINICAL NEGLIGENCE - An outstan...

Recruitment Genius: Sales Consultant - Solar Energy - OTE £50,000

£15000 - £50000 per annum: Recruitment Genius: Fantastic opportunities are ava...

Recruitment Genius: Compute Engineer

Negotiable: Recruitment Genius: A Compute Engineer is required to join a globa...

Day In a Page

Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

The enemy within

People who hear voices in their heads are being encouraged to talk back
'In Auschwitz you got used to anything'

'In Auschwitz you got used to anything'

Survivors of the Nazi concentration camp remember its horror, 70 years on
Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

Autumn/winter menswear 2015

The uniforms that make up modern life come to the fore
'I'm gay, and plan to fight military homophobia'

'I'm gay, and plan to fight military homophobia'

Army general planning to come out
Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea
America: Land of the free, home of the political dynasty

America: Land of the free, home of the political dynasty

These days in the US things are pretty much stuck where they are, both in politics and society at large, says Rupert Cornwell
A graphic history of US civil rights – in comic book form

A graphic history of US civil rights – in comic book form

A veteran of the Fifties campaigns is inspiring a new generation of activists
Winston Churchill: the enigma of a British hero

Winston Churchill: the enigma of a British hero

A C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
Growing mussels: Precious freshwater shellfish are thriving in a unique green project

Growing mussels

Precious freshwater shellfish are thriving in a unique green project