UK property industry welcomes Help Buy extension, mourns lack of Stamp Duty reform

Taylor Scott International News

As expected the first phase of the Help to Buy scheme in the UK is to be extended and this move announced by the Chancellor George Osborne in his Budget speech in Parliament has been widely welcomed by the property industry. He also announced that from midnight anyone buying a property worth £500,000 or more through a company scheme will be subject to 15% Stamp Duty, reducing the threshold for the tax from £2 million. But properties that are rented out will not be affected. He confirmed that a new garden city will be built at Ebbsfleet in Kent and claimed that the extension of Help to Buy to 2020 will be accompanied by 120,000 new homes. ‘We’re extending the Help to Buy equity loan scheme for the rest of the decade, so we get 120,000 new homes built and we’re making further reforms to our planning system and offering half a billion pounds of finance to small house building firms,’ the Chancellor said. He also said that he would be asking the Financial Policy Committee to be ‘particularly vigilant over house prices. Some experts have suggested that the extension of Help to Buy could fuel a property price bubble, especially in London and the South East. But Osborne has been heavily criticised for failing to reform the Stamp Duty tax as a whole. It is widely regarded in the property industry as being unfair and in need of change. In particular organisations like the Royal Institution of Chartered Surveyors saying that the current slab system hinders rather than helps the property market recovery. ‘The much trailed extension of Help to Buy to 2020 is not a game changer. While it provides certainty and clarity to the market, creating another 120,000 new build properties is still a modest target. We need over 230,000 just to meet current demand. Much more needs to be done,’ said Simon Rubinsohn, RICS chief economist. ‘Yet again, the Chancellor has failed to overhaul the stamp duty system, with wages well below inflation and rents rising rapidly for years, many have been struggling to save for a deposit, let alone meet a huge tax bill. Helping more buyers to enter at the lower end of the market would have resulted in more movement and transactions, freeing up stagnant property chains and bringing badly-needed housing onto the market,’ he explained. He also didn’t think much of the garden city plan, calling it ‘a garden village’ and saying that even with other new homes being built the announcements will contribute only a little housing in the South East. ‘These numbers are a drop in the ocean and do nothing to help others in the UK. More importantly, they don’t deliver the mix of homes we need across society, from the private rented sector to affordable and social housing,’ he pointed out. ‘RICS has long called for an investors’ prospectus for garden cities, which we welcome today. But we need a more ambitious approach than 15,000 homes at a… Continue reading →

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