What does the Budget mean for home buyers and sellers?

Moves generally welcomed but questions remain unanswered over Stamp Duty and the future of Help to Buy

Chancellor of the Exchequer George Osborne's budget has been described as "a mixed bag for the housing market".

Grenville Turner, Chief Executive of Countrywide  welcomed the extension of the Help to Buy Equity Loan scheme to 2020 and the  announcement to build a new garden city in Ebbsfleet, as well as the regeneration of Brent Cross.

"Housing is a key enabler to broader economic growth, having a knock on effect on employment and consumer spending," he said. "It is pleasing to hear that housebuilding is up 23 per cent and the Government has pledged half a billion pounds worth of finance for small house builders to get them building more new homes."

Henry Woodcock, Principal Mortgage Consultant at financial services software specialists IRESS described the Budget as a mixed bag for the housing market. "Extending Help to Buy by another four years will continue to stimulate first-time buyer demand and underpin housebuilding, boosting the market from the bottom up.

"However, the failure to address the stamp duty question is a blow for prospective buyers. More and more buyers are falling into the 3 per cent net as the average house price climbs above £250,000, and the disproportionate tax impact is holding back the market.

"If the archaic slab structure is to remain, we need to see stamp duty thresholds tied to house price inflation, and an acknowledgement of regional disparity in house values. Otherwise, buyers in London and the South east will be hit disproportionately hard at the same time as having to meet higher house prices."

Paul Smith, CEO at haart estate agency said Mr Osborne had turned a blind eye to calls for Stamp Duty reform.

"The Chancellor’s deaf ear to the myriad of calls from industry to reform Stamp Duty in the Budget is at best disappointing and at worst will perpetuate a dysfunctional housing market," he said. "In one fell swoop he could have increased the supply of homes for sale and capped rising house prices helping every level of the housing ladder. Instead he’s turned a blind eye and given nothing to the majority of homebuyers and sellers rather than throwing them a lifebelt."

Miles Shipside, Rightmove director and housing market analyst said: "Londoners buying in the capital are now faced with an average asking price of just over £552,000. Those buying between £500,000 and £2 million have been at a stamp duty disadvantage in the bidding battle against company structure buyers, often foreign-based investors.

"With the Chancellor introducing a 15 per cnet stamp duty tax on buyers purchasing in a corporate envelope, Londoners now have a minimum 10 per cent bidding advantage courtesy of lower stamp duty before they end paying an overall cost equivalent to a company structure buyer.

"As it comes into force from midnight, some deals may fall out of bed as corporate buyers try and renegotiate, and may give a knock down price opportunity to those Londoners looking in the half-million to £2 million bracket. It will also take some of the heat out of the London market, though supply shortages will remain in many locations.

"The Chancellor mentioned an apparent exemption in the new 15 per cent tax for those intending to rent out. While buying as a buy-to-let would help boost much needed rental supply rather than the property standing empty, it remains to be seen how this will be policed."

Simon Crone, Vice President – Mortgage Insurance Europe for Genworth said the Budget left vital questions about Help to Buy unanswered. "The mortgage guarantee - Help to Buy 2 -remains a temporary fix to a long-term problem of credit supply to first time buyers. The more time that passes without a clear exit strategy, the more we risk a ‘cliff’ effect in two years’ time that will undermine building and home-owning ambitions," he said.

Nick Sanderson, CEO of Audley Retirement added: "Extending Help to Buy by another four years is a positive move and will continue to benefit first-time buyers and will stimulate housebuilders, but what about the other end of the market? The majority of those aged over 65 own their homes outright and the government must encourage them to downsize in order to free up much needed housing stock.

"A stamp duty exemption for this demographic would be significant and any rebate for downsizing would be cost neutral for the government. This coupled with incentivising and supporting a generation of ‘last time buyers’ is key to ruffling a few feathers, and committing to an action that could deliver a wide range of benefits across the UK population."

Simon Rubinsohn, Chief Economist at the RICS described it as "a tight budget with little room for manoeuvre", and emphasising the failure to overhaul the stamp duty system. "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.

"While plans for regeneration and new homes in Barking, Brent Cross and the new garden ‘city’ at Ebbsfleet which is really just a garden village will contribute a little housing in the South East. These numbers are a drop in the ocean and do nothing to help others in the UK. More importantly, they don’t deliver the mix of homes we need across society, from the private rented sector to affordable and social housing. RICS has long called for an investors’ prospectus for garden cities, which we welcome today. But we need a more ambitious approach than 15,000 homes at a time. What we need is a proper political vision for garden cities and the wider economy.

"Meanwhile, the much trailed extension of Help to Buy to 2020 is not a game changer. While it provides certainty and clarity to the market, creating another 120,000 new build properties is still a modest target. We need over 230,000 just to meet current demand. Much more needs to be done."

Stephanie McMahon, Head of Research at Strutt & Parker described it as a "very conservative"  which did not rock the boat in terms of  the property market.

"Whileit is disappointing that he has not taken the rather ripe opportunity to change our painfully out of date Stamp Duty system," she commented, "a Budget which will have little impact on the housing market must be taken as a positive. The lack of change will offer some much-needed stability and go some way to dampen uncertainty over the next 12 months, thus allowing the regional markets to further recover ahead of next May’s general election."

Paul Frost of buying agency Prime Purchase, said that Mansion tax was the measure that many homeowners were really panicking about.

"It is telling that the level at which those buying property via a corporate envelope will have to pay 15 per cent stamp duty has fallen from £2m to £500,000, not long after the higher level was introduced. There are fears that such a tax creep would be similarly applied to mansion tax were it to be introduced, so that while it may initially hit what you might consider rich people owning a £2m home, before long it would drip down so that those earning a £1.5m or £1m home would be affected.

"Will the reduction in purchase prices from £2m to £500,000 have any impact? It might put off a buyer from Paris from purchasing a one-off pied a terre in the middle of London via a corporate envelope but many will simply buy in their own name instead. It will be interesting to see whether overseas investors will be deterred from snapping up several flats at around £650,000 a pop in say Battersea Power Station but in such an instance many of these would be rented out anyway. It will be interesting to see how this will be policed - will they need to be let all the time? What about void periods and what is a reasonable void? It could turn into a logistical nightmare for the Government."

Discover more property articles at Homes and Property
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

SThree: Associate Recruitment Consultant -Engineering -Renewable Energy

£18000 - £23000 per annum + competitive: SThree: As an Associate Recruitment C...

Recruitment Genius: B2B Media Sales Professional - Work From Home

£20000 - £50000 per annum: Recruitment Genius: Enjoying rapid growth we contin...

Recruitment Genius: B2B Media Sales Professional - Work From Home

£20000 - £50000 per annum: Recruitment Genius: Enjoying rapid growth we contin...

Recruitment Genius: B2B Media Sales Professional - Work From Home

£20000 - £50000 per annum: Recruitment Genius: Enjoying rapid growth we contin...

Day In a Page

Seifeddine Rezgui: What motivated a shy student to kill 38 holidaymakers in Tunisia?

Making of a killer

What motivated a shy student to kill 38 holidaymakers in Tunisia?
UK Heatwave: Temperatures on the tube are going to exceed the legal limit for transporting cattle

Just when you thought your commute couldn't get any worse...

Heatwave will see temperatures on the Tube exceed legal limit for transporting cattle
Exclusive - The Real Stories of Migrant Britain: Swapping Bucharest for London

The Real Stories of Migrant Britain

Meet the man who swapped Romania for the UK in a bid to provide for his family, only to discover that the home he left behind wasn't quite what it seemed
Cheaper energy on the way, but it's not all sunshine and rainbows

Cheaper energy on the way, but it's not all sunshine and rainbows

Solar power will help bring down electricity prices over the next five years, according to a new report. But it’s cheap imports of ‘dirty power’ that will lower them the most
Katy Perry prevented from buying California convent for $14.5m after nuns sell to local businesswoman instead

No grace of God for Katy Perry as sisters act to stop her buying convent

Archdiocese sues nuns who turned down star’s $14.5m because they don’t approve of her
Ajmer: The ancient Indian metropolis chosen to be a 'smart city' where residents would just be happy to have power and running water

Residents just want water and power in a city chosen to be a ‘smart’ metropolis

The Indian Government has launched an ambitious plan to transform 100 of its crumbling cities
Michael Fassbender in 'Macbeth': The Scottish play on film, from Welles to Cheggers

Something wicked?

Films of Macbeth don’t always end well - just ask Orson Welles... and Keith Chegwin
10 best sun creams for body

10 best sun creams for body

Make sure you’re protected from head to toe in the heatwave
Wimbledon 2015: Nick Bollettieri - Milos Raonic has ability to get to the top but he must learn to handle pressure in big games

Nick Bollettieri's Wimbledon files

Milos Raonic has ability to get to the top but he must learn to handle pressure in big games
Women's World Cup 2015: How England's semi-final success could do wonders for both sexes

There is more than a shiny trophy to be won by England’s World Cup women

The success of the decidedly non-famous females wearing the Three Lions could do wonders for a ‘man’s game’ riddled with cynicism and greed
How to stop an asteroid hitting Earth: Would people co-operate to face down a global peril?

How to stop an asteroid hitting Earth

Would people cooperate to face a global peril?
Just one day to find €1.6bn: Greece edges nearer euro exit

One day to find €1.6bn

Greece is edging inexorably towards an exit from the euro
New 'Iron Man' augmented reality technology could help surgeons and firefighters, say scientists

'Iron Man' augmented reality technology could become reality

Holographic projections would provide extra information on objects in a person's visual field in real time
Sugary drinks 'are killing 184,000 adults around the world every year'

Sugary drinks are killing 184,000 adults around the world every year

The drinks that should be eliminated from people's diets
Pride of Place: Historians map out untold LGBT histories of locations throughout UK

Historians map out untold LGBT histories

Public are being asked to help improve the map