Briefly casting the spotlight on the housing market in his third Budget as chancellor, Phillip Hammond announced that he will extend the cancellation of stamp duty for first-time homebuyers on properties up to £300,000 to first-time buyers of shared ownership properties valued up to £500,000. Furthermore, he stated that the measure would be retrospective, so that any first-buyer who has bought a home since the last Budget will benefit.
Removing Stamp Duty on all shared equity purchases up to £500,000 is great news for prospective homebuyers getting into the market for the first time. Since stamp duty for first-time buyers was done away with, many more people have been able to get their foot on the first rung of the property ladder. In fact, as Hammond announced, the number of first-time buyers purchasing property is at an 11-year high. It seems the focus the government has placed on providing more opportunities for first-time buyers is coming to light and we are now seeing the results. Hopefully soon we will also see more measures put into place that will also assist buyers and homeowner in other sectors of the market as well.
More money for Housing Infrastructure Fund
Hammond also announced that he will give a further £500m to the Housing Infrastructure Fund, which is designed to enable a further 650,000 homes to be built. For a long time, the demand for homes in the UK has outweighed the supply. This further allocation of funds will assist the government in addressing the housing shortage and will create more opportunities for people to become homeowners.
Housing on the high street
It is interesting to note that the government is also looking at alternative spaces to build housing. The Chancellor said that the government will be looking to turn unused commercial spaces on the high streets into residential housing, which is yet another way they are looking to eradicate the housing shortage, as well as rejuvenating the high-street and creating more foot traffic past high-street businesses. An amount of £675 million will be put into a future high street fund to redevelop un used areas and help the high streets adapt and increase interest for local businesses.
Lettings relief limited
In the Budget, Hammond said that from April 2020 lettings relief would be limited to properties where the owner is in shared occupancy with the tenant. Now, the lettings relief is often used by people who have difficulty selling their home, whereby a maximum of £40,000 of gain per owner is exempt if the property is rented out. As of April 2020, the lettings relief will only be available where the owner and tenant are in shared occupation.
Permanent tax relief has increased from £200,000 to £1 million for two years to encourage more investment. With many international property investors adopting a wait-and-see attitude towards the UK before the Brexit decision, especially in the central London market, a tax relief could be a great incentive to allure them back in and encourage further investment in the country.
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