Chancellor George Osbourne gave his Autumn Statement to parliament earlier this week and amongst significant cuts to the public sector, there were also, as imagined implications for the housing sector.
The first announcement was a further 3% rise in Stamp Duty on second homes and buy to let properties. This is expected to increase the price of second homes and inevitably lower the prices achieved on buy to lets. The government runs the risk of seriously slowing the amount of property transactions, which obviously means less money for the treasury. Osbourne, however may feel as though he is supporting the under-privileged by pushing up buy-to-let Stamp Duty, as this will in theory reduce the number of buy-to-let properties. It could be argued however that such an inflationary measure will discourage small landlords and reduce the rental supply – prices will inevitably rise.
Some good news- a discounted deposit scheme for first time buyers through the ‘right to buy scheme’ is obviously welcomed and many are expected to take up the opportunity.
There has been a plan announced to build 400,000 new homes, doubling the housing budget. Should this plan come to fruition it would obviously be a massive bonus to many looking for accommodation, especially in the London area where stock is dwindling. It remains to be seen however if these promised homes are going to be available for rent or will simply be snapped up by investors or buy to let landlords.
In light of the announcements, many feel as though George Osborne is essentially subsidising one sector of the housing market over all others, home buyers already benefit from significant Government funding. It remains to be seen what significant help will be given to first time buyers and renters alike.
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