Last Updated on 18.7.16 by Gorvins
Last week George Osborne announced the Summer Budget in what was the first Conservative-only budget since the 1990s. Within the budget, it was declared that there would be a crackdown on the tax relief that buy-to-let landlords are currently experiencing. Some landlords, depending on the extent of their property portfolio, are benefiting from up to 45% relief on private rented homes.
The previous system is said to assist landlords over ordinary homeowners and first-time buyers, who are striving to make their way onto the property ladder. The current landlord tax relief is set to be scrapped in 2017 to the basic rate of 20% tax, which is likely to discourage landlords from venturing into the market and snapping up the properties. The government has stated that it wants to ‘level the playing field’ between first-time buyers and landlords.
All this means that first-time buyers are set to be boosted. The property market is extremely competitive, with demand far outweighing supply. Therefore, less landlords buying houses to let means there will be more housing on offer for potential first time buyers.
This week we learnt about the 200 home tower block in London which sold out in less than five hours! Homes totalling £140 million were bought by a mixture of first time buyers and investors with 50% of the purchases made from internationals, including Greek, Italian and Chinese property developers. What’s more, the buyers won’t get the keys to their new apartment until 2019! The rapid, advanced selling of residential property highlights the outrageous need for more housing in the UK.
House Price Increase
This news comes at a time when property prices are soaring. According to figures from Halifax, house prices increased by 1.7% in June, tipping UK average over the £200,000 barrier for the first time.
In comparison to this time last year, prices are up by a huge 9.6%, which is in part due to the record low level of homes available for sale. The Royal Institute of Chartered Surveyors have shown the supply of homes for sale to have plummeted to the lowest levels since records began back in 1978.
The building of new homes, or lack of it, is not good news for first-time buyers who are often stepping onto the bottom rung of the ladder. Trying to level out the playing field is one way the government may be trying to make it up to first-time buyers along with the number house buying schemes they have unveiled; discussed in this ‘Help on Offer’ blog post.
The importance of FTBs and how Gorvins can help
First-time buyers are vital for the whole property market. Often at the start of the chain, a first-time buyer allows other homeowners to move up the ladder. This freeing up of properties for second and multiple time buyers lends liquidity to the entire market.
As the cost of buying a house increases, it is important that a purchaser receives the best value for money conveyancing service. Our large and experienced residential property team offer an excellent, professional and dedicated service, enabling you to move into your property in one smooth transition. Even more, we have an exclusive 25% discount for first-time buyers only.
To speak to someone in our team, give us a call on 0161 930 5117 or send us an email to firstname.lastname@example.org.
If you would like to read more about the budget and potential impact on you or your business, see this fantastic post from Christian Mancier (@mancier): Summer Budget 2015 – was it good for business?