How did yesterday’s budget affect you? Is investing in property something you’re interested in but you were waiting to see what was announced in the budget before making any decisions?
Given that there is already unrest in the economy while Brexit discussions continue, compared to previous years, this year’s budget wasn’t hugely controversial for a lot of people. For many who are keen to invest in property it was good to hear that Phillip Hammond, Chancellor of the Exchequer, instead introduced effective measures that will make buying a home cheaper for millions of first-time buyers.
The good news for landlords and would-be property investors is that there was nothing in this budget that threatens house prices or buy-to-let income. Our growth position has been downgraded and interest rates are likely to remain low, even if the Bank of England increases the base rate again, and this suggests that it’s probably a fairly stable market to invest in buy-to-let. After all, if you have an economy that isn’t growing, your chances of getting a good return on your money from other asset classes is slim to none.
To ensure that the new measure also benefits those looking to buy in areas where property prices are higher, the relief applies to the first £300,000 on property purchases up to the value of £500,000. This is expected to result in a Stamp Duty cut for 95% of first-time buyers and abolish the tax altogether for 80%.
In addition, Hammond also admitted that ‘successive governments for decades have failed to build enough homes to deliver the home owning dream that this country has always been proud of or indeed to meet the needs of those who rent’. It was a welcome diversion from the blame that has been laid at the door of private landlords most recently.
As a result, he is pledging to increase the supply of land for new homes through panning reform and by supporting the house building sector.
Hammond said: “There is one area where young people today will rightly feel concerned about their future prospects and that is in the housing market.
“House prices are increasingly out of reach for many. It takes too long to save for a deposit and rents absorb too high a portion of monthly income so the number of 25 to 34-year-olds owning their own home has dropped from 59% to just 38% over the last 13 years…
While these announcements are positive, the fact remains that people still need warm, safe and affordable rental properties to live in. If this Conservative Government wants to increase home ownership and eliminate rough sleeping by 2027, then they need to build more affordable homes and encourage the effective use of existing housing stock with properties such as HMOs.
