Budget 2016 – the effects on UK housing
Chancellor George Osborne has presented his eighth Budget and among the many new announcements are a number of factors affecting the UK’s homeowners, house-hunters, housing market and property industry.
The key points are:
| Buy-to-let | The 3% surcharge in stamp duty on buy-to-let and second homes announced in last year’s Autumn Statement is confirmed, applicable on all transactions from 1 April 2016. Osborne was expected to provide more details about the scheme, but only confirmed that larger investors would not be exempt. |
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| Housebuilding and new homes | £1.2bn has been found to help release brownfield land to build 60,000 homes over the next four years - half at market rate, half as part of the government's discounted Starter Homes Initiative |
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| Tax | The Chancellor has previously announced a change to tax relief on buy-to-let mortgage interest. Phasing in from 2017, relief for higher-rate tax payers will be limited to the basic rate of 20%. He made no further reference to this today. A new Lifetime ISA is being introduced from April 2017, giving a single product for anyone aged up to 50 to save up to £4,000 per annum with a 25% bonus from government - effectively tax-free saving. The money can be used for saving for a deposit for a home, much like the recently introduced Help to Buy ISA. |
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| Insurance | An increase in Insurance Premium Tax (IPT) of 0.5% will probably lead to an increase in home insurance costs for many. |
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| Help to Buy/Shared Ownership | Osborne pledged 135,000 new Shared Ownership homes by 2021 in the last Autumn Statement, and the increase of the maximum household income for Shared Ownership eligibility to be raised to £90,000 this year. He also introduced Help to Buy London earlier this year. No further announcement was made today on either of these popular schemes. |
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| Other | Crossrail 2 is approved, with a possible effect on property prices around the proposed link from south-west London to north-east London £700m has been earmarked to provide further flood defences to protect tens of thousands of homes across the UK |