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
Alex Johnson has been part of The Independent's online team since 2007 and writes The Home Front property column. He has been writing about microarchitecture on his internationally-acclaimed website Shedworking since 2006 and is the author of three books, Shedworking: The Alternative Workplace Revolution, Bookshelf, and Improbable Libraries.
Wednesday 19 March 2014
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."
Our verdict on today's #Budget2014 plans to build more homes? They're a glimmer of hope for next generation – but there’s lots more to do.— Shelter (@Shelter) March 19, 2014
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."
Close to the market town of Eye, this four-bedroom detached home offers a double-height living room which takes the place of the original, 19th-century, chapel nave.
Dating back to the 19th century, this four-bedroom home needs modernising. Spanning three storeys, the red-brick house has a fireplace, a small terrace and a cellar.
Just outside of Cambridge, this single-storey home offers three double bedrooms, a living room with vaulted timber ceiling and ladder steps that lead to a mezzanine study area.
This six-bedroom Georgian home is on three floors with open fireplaces, a two oven Aga, an annexe, and cottage gardens with outbuildings and a car barn.
A former coach house, Glebe Farm Stable is now a three-bedroom cottage with a double car barn, an attached office, kennels and an outbuilding that's currently used as a gym.
Located beside an impressive Victorian viaduct, this four-bedroom home has an open-plan living area that is glazed on two sides, with skylights and high ceilings.
A former furniture workshop, this three-bedroom home has high ceilings and painted brick walls, in a village setting only fifteen miles from the coast.
This five-bedroom stone townhouse features a pine staircase and an Inglenuk fireplace, double doors from the lounge give access to an enclosed courtyard.
This five-bedroom, detached home blends traditional and modern design; the sleek kitchen features a gas hob and oven set within an exposed chimney breast.
Moored in Chelsea's Cheyne Walk, this houseboat offers two double bedrooms and a teak deck that's ideal for al-fresco dining.
Surrounded by woodland, this five-bedroom manor house has plenty of outdoor storage space in the form of three converted loose boxes, two smaller outhouses and a woodstore.
This six-bedroom home is set amongst three acres of grounds. Currently a large family home, Clift Hill has potential to make a B&B or countryside retreat, subject to change of use permissions.
This Grade II-listed three-bedroom home is situated on a private road, just a short walk from the sandy beaches of Frinton-on-Sea.
Less than five miles from Malmesbury, this four-bedroom cottage comes with equestrian facilities and gardens that extend to approximately three acres.
Spanning three storeys, this late-Victorian five-bedroom farmhouse is a spacious family home with a modern interior and B&B potential.
With an original church arch, this triplex one-bedroom church conversion has a light, spacious, feel and comes with a secure off-street parking space.
This recently-refurbished three-bedroom home has bi-folding doors that lead out to a decked seating area - ideal for alfresco dining this summer.
Well-located for coastal walks and popular restaurants, this detached four-bedroom home offers views over farmland, to the Solent, the Purbecks and Bournemouth.
If you love high ceilings, school conversions like this one are bang on the money. This two-bedroom flat is minutes from Burgess Park and the foodie haven at Borough Market.
Set within a church conversion in Bermondsey, this two-bedroom maisonette combines existing features, such as original arches and brickwork, with a contemporary finish.
In the pretty market town of Bungay, this grade II-listed Mill House is arranged over four floors, offering four bedrooms and three reception areas.
This four-bedroom Edwardian home offers a combination of original features and contemporary design after a renovation by the current owners.
This four-bedroom home offers a vaulted ceiling in a breakfast room that's ideal for summer entertaining with doors that open to the patio and garden.
On the market for the first time in more than 50 years, this six-bedroom home is a project with vast potential - spread over three floors of living space.
This five-bedroom home comes with a range of outbuildings including a large barn which could be converted into a self-contained granny-flat or rental.
Surrounded by rolling countryside, this four-bedroom barn conversion comes with a self-contained, one-bedroom annexe that could serve as an office or a holiday let.
Located near Harrogate town centre, this five-bedroom Victorian terrace is arranged over three storeys while a current study serves as an optional sixth bedroom.
A ground-floor flat in a country house, located a mile from Sway; this two-bedroom home would make an ideal weekend retreat on the edge of the New Forest.
On a popular residential lane in Caterham on the Hill, this four-bedroom family home offers a secluded garden and a convenient location for local schools and public transport.
Just a short walk from Westerham green, this three-bedroom cottage has a light kitchen with exposed brickwork and double doors that lead to a south-facing garden.
In a prime spot opposite the River Thames, this one-bedroom flat has an 18sq ft reception room with glass doors that open out to a private terrace.
Set in the hills above Llanwrda Village, west Wales, this 18th-century three-bedroom farmhouse has holiday-let potential from a separate barn conversion and annexe.
This charming end-of-terrace townhouse is arranged over three floors, with two double bedrooms and a private courtyard garden located at the rear of the property.
Located in the University area, this semi-detached five-bedroom home is arranged over three floors - there's even a rear garden and off-road parking too.
Only a few minutes' drive from the charming town of Marlow, this two-bedroom home sits on the private riverside estate of Harleyford.
This detached four-bedroom home in Middleyard is arranged over two floors, with features that include a wood-burning stove and bespoke oak staircase.
In a row of eight detached Georgian residences, this five-bedroom home offers views of The Sound, Mount Edgcumbe and Cornwall from its impressive veranda and full-length balcony.
If you love cooking for friends this two-bedroom flat - complete with views of the iconic Battersea Power Station and an open-plan kitchen/dining area - will go down a treat.
Located above Grasmere village, this five-bedroom home is arranged over three floors and offers countryside views across Grasmere Lake towards Silver Howe.
This four-bedroom detached home comes with a double carport, useful workshop, garden and two walkways that offer views of the adjacent countryside.
With space for an equestrian business, a greenhouse for growing your own veg, a wine store and a gym; this five-bedroom home has all the ingredients for a country retreat.
The decked roof terrace of this two-bedroom flat is perfect for summer drinks while large windows and ample storage space make for a light and spacious interior.
Set sail for this four-bedroom farmhouse in Cowes. With five acres of land and an indoor pool, this home oozes character. There is even potential to let a one-bedroom annexe.
Surrounded by approximately 15 acres of grounds, this six-bedroom grade II-listed home has been extensively refurbished yet retains many period features.
This four-bedroom home comes with a two-bedroom cottage and commercial office, with planning to extend, in a stunning courtyard setting.
In a pretty Norfolk village, this four-bedroom family home is surrounded by landscaped gardens, with even a self-contained annex for guests.
A few miles from the seaside at Perranporth, this four-bedroom farmhouse sits amongst nine acres of idyllic grounds - including a lake and two barns used as holiday lets.
This five-bedroom home is arranged over three floors of a converted Victorian hospital, offering spectacular views of the Pentland Hills - only three miles from the city centre.
This four-bedroom detached home comes with grounds that span to approximately 2.5 acres, as well as two large patio areas and a double garage.
This four-bedroom cottage is a Grade II-listed town house, well-located for the thriving market town of Nailsworth.
A four-bedroom apartment on the ground floor of a stunning period property in North Yorkshire, with two kitchens and a large south-west facing garden.
This high-spec two-bedroom home is part of a smart collection of new flats at Beaufort Park and has a large decked balcony that's perfect for summer drinks.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Overlooking a golf course, this six-bedroom Edwardian detached home spans four storeys and retains many period features including the original, operational servants' bells...
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
In a Grade II-listed manor just outside of Bath, this three-bedroom home is arranged on two floors with a skylight in a vaulted roof line.
Open the living room's bi-fold wooden doors to reveal a retro-style kitchen, and a conservatory leading to a paved garden at this three-bedroom home.
A Grade II-listed, four-bedroom home, in a charming Somerset village, with a two-storey studio that could be converted into a holiday cottage
A modern four-bedroom Victorian home, within walking distance to the high street
A luxury apartment in the Gothic mansion of Wyfold Court in Kingwood, offers six bedrooms spread over three floors and a turret
Life & Style blogs
The moment a Queen's Guard soldier lost it and drew his gun at annoying tourist
Greece crisis: IMF was pushed around by Angela Merkel and Nicholas Sarkozy – and now it is being humiliated
Greece crisis: The wider lesson is that it’s time to abandon this failed experiment in currencies
'I wish the BBC would stop calling it Islamic State' – David Cameron unleashes frustration at broadcaster
Pentagon accuses Russia of 'playing with fire' over nuclear threats towards Nato
They are neither a 'state' nor 'Islamic': Why we shouldn't call them Isis, Isil or IS
- 1 Tunisia hotel attack: Locals form 'human shield' to protect hotel from gunman Seifeddine Rezgui
- 2 Russian officials ban yoga because it's too much like a religious cult
- 3 German ethics council calls for incest between siblings to be legalised by Government
- 4 Ginger Pride festival to take place next summer, organisers say 'time of bullying gingers is over'
- 5 Facebook rainbow profile pictures likely being tracked by social network
£18000 - £23000 per annum + competitive: SThree: As an Associate Recruitment C...
£20000 - £50000 per annum: Recruitment Genius: Enjoying rapid growth we contin...
£20000 - £50000 per annum: Recruitment Genius: Enjoying rapid growth we contin...
£20000 - £50000 per annum: Recruitment Genius: Enjoying rapid growth we contin...