What effect will the 2018 Autumn Budget have on housing?
At the end of October we saw the Chancellor set out his 2018 Autumn Budget. Although he was relatively quiet when it came to property there were a few points that may have an effect on the housing marketing in the coming months.
Stamp Duty and Help to Buy
In last years Autumn Budget we saw Stamp Duty abolished for first-time buyers who were buying a home worth up to £300,000. This year that policy has been extended to first-time buyers who are buying between 25% and 75% of a shared ownership property and paying rent on the remainder. The abolishment of stamp duty on shared ownership homes applies to properties worth up to £500,000. This has also been backdated so anyone who has bought a shared ownership property since the last budget will benefit.
The popular Help to Buy scheme has been extended for a further two years until 2023.
In an attempt to reduce the competition for UK residents wanting to buy property and lower prices, it has been proposed that overseas purchasers will face an extra surcharge of 1-3% on top of the stamp duty charges they already pay. This new tax is not due to be implemented until further investigation has been done into the premise.
This year’s Autumn Budget sees £500m being put into the Housing Infrastructure Fund, from which local councils can apply for money to aid with house building. It is hoped this money will allow the building of 650,000 new homes. The previous cap that limited how much money a council could borrow to build council houses has been scrapped and there has also been a new deal made with housing associations across England to create 13,000 homes.
To encourage smaller enterprises to build more houses Mr Hammond has stated that they can receive up to £1bn of British business bank guarantees.
Struggling High Street
Addressing the issues of dwindling High Streets, the Chancellor has created a £675m fund that can be used by councils to rejuvenate their local retail areas. One suggestion for the possible use of this fund is to transform empty retail or commercial buildings into new homes, with new processes to be discussed at a later date on how to make the conversion of a shop into a home simpler. It has been suggested that converting unused retail and commercial space has the potential to create 300,000 to 400,000 homes.
Private residence relief
Hammond announced that the rules surrounding private residence relief will be tightened. From April 2020 lettings relieve will only be applicable to properties where the owner shares occupancy with their tenant. The final period exemption has also been reduced from 18 months to nine months.