Rivera Property Consultants is one of the UK’s most experienced Buying Agents with a strong focus on London and the Home Counties.
Rivera Property Consultants is one of the UK’s most experienced Buying Agents with a strong focus on London and the Home Counties. Like many businesses in the property space, we keep a keen eye on the Autumn budget (2017), as it in part sets the tone for the year ahead. We welcomed last week's stamp duty changes for first time buyers, as it is important the next generation gets to enjoy the benefits of being a homeowner.
Ben Rivera, co-founder of Rivera Property Consultants went onto explain “Mr Hammond without doubt made some progress in the delivery of his budget and managed to draw a line under previous communication errors. That said, Mr Hammond mentioned the importance of the countries SME’s but did little to action (rates changes held), Mr Hammond instead focused on housebuilding and tweaked the stamp duty make-up for first time buyers. I would have liked to have seen a nod to the importance of the London and South Eastern property market, to if nothing else encourage investment and increase transactions by removing some of the stealth taxes raised by his predecessor, Mr Osborne, as this is something London is crying out for to ensure the UK is seen as open for business”.
Below are the major changes announced in the Budget affecting the property market in England and Wales.
Stamp Duty for First-time Buyers
Stamp duty has been abolished from today for first-time buyers purchasing property under £300,000, and first-time buyers buying property for under £500,000 will only pay 5% on the sum over £300,000 – a saving of up to £5,000. Purchases above £500,000 will pay the normal rate of stamp duty.
Increased Tax on Empty Homes
To encourage owners of empty homes to bring their properties back into use, the government has given local authorities the go-ahead to increase the council tax premium on empty homes from 50% to 100%.
The government will consult on the barriers to landlords offering longer, more secure tenancies to those tenants who want them.
Help to Buy
£10 billion has been confirmed for the Help to Buy scheme, which helps first-time buyers buy a home with a 5% deposit. This scheme has already helped 135,000 first-time buyers, the additional funds aim to help another 135,000.
There are apparently 270,000 unbuilt planning consents in London and the Chancellor will be launching an enquiry into why these have not been built. If he can find no acceptable reason, he will look at using certain powers to get the properties built.
Capital Gains Tax Payment Window
In 2015 the Government announced that it was significantly reducing the time in which Capital Gains Tax for a gain from residential property needed to be paid to 30 days. However, this has now been deferred until April 2020.
To align the UK with other countries and remove an advantage which non-residents have over UK residents, all gains made by non-residents from sales of UK property will be brought within the scope of UK tax. This will apply to gains accrued on or after April 2019.
Rivera Property Consultants Outlook
Despite slower price growth in London and the Home Counties, affordability remains a challenge in the wider London market, especially for first time buyers and those earning under £60,000p/a. Buoyancy and activity continues to be affected by a number of factors. The increasing likelihood of higher borrowing costs, following an expected continued increase in Bank of England's Base Rate (2.5% by 2020) is a consideration for anyone planning to take out a new mortgage or renew an existing mortgage coming to the end of a fixed term.
At the top end of the residential property market, there is still a reasonable selection of available properties for cash rich buyers to choose from, many of whom are looking to take advantage of the weaker market and exchange rate. That said, as the market in Prime Central London continues to slow, there is a trend of more and more sellers choosing to sell ‘Off Market’. Depending on which source you believe, the number of properties that have transacted this year without coming to the open market is somewhere between 24% - 35%, making it even more important to either use the services of a Buying Agent or spend the time researching the market and building relationships with estate agents, solicitors, accountants, lawyers and other property related professionals in order to see the whole of market.
While none of us have a crystal ball, the general consensus is that the property market in London and the Home Counties will continue to soften in the run up to Brexit, however in our opinion, there has never been a better time to secure a home or investment. Many of our clients continue to ask if they should buy now or wait and our simple answer is that as there is a lot less competition now than in a rising or more buoyant market, therefore we are (in general) able to negotiate far greater discounts for them than what we would normally be able to.