“George Osborne’s eighth Budget was another intriguing one for the property market, particularly the residential market. The Government’s continued quest to manipulate market forces in favour of first-time buyers was a central tenet of the Chancellor’s focus on supporting the next generation but I am far from convinced the measures announced today will have the impact he is hoping for.
“The approach with first-timers is to free up precious capacity by targeting buy-to-let investors, continuing the theme of Osborne’s recent budgets. Across the SDL Group, particularly in mortgages, auctions and estate agency, we have noticed that this led to an upsurge in activity ahead of the 1st April stamp duty increase. As a result, we had begun to investigate the possibility of offering our group services and expertise in residential property to utilise the opportunity presented by the last Budget, which exempted portfolios of over 15 properties from the additional 3% levy.
“This exemption has now been removed, however, and while the Treasury says this will raise more than £600m, with £115m committed to a scheme to help the homeless, Osborne’s main goal is clearly to stop landlords and buy-to-let investors from driving first-time-buyers out of the market.
“While there is no doubt the various Help to Buy and shared ownership schemes have had a positive impact since their introduction, I am concerned there will be an immediate impact of this new legislation. With the Private Rental Sector now so important for 20- and 30-somethings across the country - as we see through our management of Sigma Capital’s DifRent project - my concern is this move will only serve to increase the price of renting as landlords pass their costs on to tenants. This, clearly, would make life even more difficult for prospective first-timers currently renting by increasing their monthly outlay rather than freeing them up to save for the all–important deposit.
“Clearly, the new Lifetime and recently launched Help to Buy ISAs are designed to help in this regard but by the time the Government incentives are meaningful will the increase in house prices forecasted wipe out that bonus.
“Only time will tell what the true impact of today’s Budget will be but it is clear that residential property in the UK will remain a bone of contention for many years to come.”
- Comments from Rob Clifford on today’s Budget. Rob is Group Commercial Director of property group, SDL Group