What’s in it for borrowers, developers and the housing market?
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No-doubt spurred-on by analysis earlier in 2018 that revealed house-building across about 50% of England was slower than before the financial crash of 2008, the Chancellor revealed he’s providing more help for those struggling to get onto the property ladder and is attempting to deal with the shortage of housing within the UK. In his final autumn budget before the UK leaves the EU, Philip Hammond delivered housing measures that are designed to help mark the end of austerity, including;
1. Help for first time buyers
Last Autumn the government eliminated stamp duty (a tax you need to pay if you buy property or land) for first-time buyers buying a home in the UK worth up to £300,000. This has already helped over 120,000.
This time the Chancellor has abolished stamp duty for first-time buyers of shared ownership properties worth up to £500,00, if the buyer purchases 25%-75% of a home and then rents the remaining percentage. This is backdated to anyone who bought a shared ownership property in the UK since last year’s budget. So, it’s estimated that around 200,000 people are in for an unexpected windfall.
2. The Help to Buy scheme is improved and extended to 2023
The Help to Buy scheme is a government scheme that was announced back in 2013, designed to help those struggling to get onto the property ladder or move up it due to having limited equity.
The scheme was intended to end in April 2021, but is now scheduled to end in April 2023, an extension of two years.
At the moment, to qualify for the Help to Buy scheme, the property price is capped at £250,000 outside London. But the revised scheme recognises the huge regional variations in house prices, so the maximum price of a Help to Buy house in the South East will be £437,600, but in the North East it will be £186,100.
Extending and revising the scheme helps both first-time and house builders as they now have more certainty over there long-term planning. It’s hoped the measure will give house builders the confidence to build thousands of new homes.
3. Homes on the High Street
£1.5 billion is ear-marked for boosting our struggling High Streets. A portion of this money can be used by local councils to transform empty shops and commercial buildings on the High Street into much needed homes. Phil Hammond said,
“If British High Streets are to remain at the centre of our community life, they will need to adapt.”
The government has pledged to consult on how to make it more easy to convert commercial buildings into homes, a hint that perhaps planning permission will be eased around this.
It’s estimated that between 300,000 to 400,000 new homes could be added to the housing supply just by turning the empty space above many shops into homes.
4. An extra £500 million for the Housing infrastructure Fund
This is a fund that local councils can apply to ‘dip into’ to use as help with building homes. Experts believe that this could help build around 650,000 new homes.
5. Help for nine housing associations
The government has allocated £653 million to housing associations that should help see around 13,000 homes built throughout England.
6. Guarantees of up to £1bn for smaller house-builders
Although this was already announced earlier this week, the Chancellor confirmed in his Autumn Budget that the Government is setting-up a £3bn Home Building Fund. This is comprised of:
• £1bn of loans to be made available to smaller house builders to build 25,000 new homes before 2020
• £2bn to go on long-term funding for infrastructure, unlocking a pipeline of 200,000 new homes in the long-term, with the emphasis on developing brownfield sites.
If the Autumn 2018 Budget has encouraged you to get onto the property or up it, make sure you benefit from the expertise of a mortgage broker.