A property experts view of the budget

EXPERT VIEW

Q.        How much difference will the recent
Budget make to the housing market?
 

A.        In practice, of course, it’s much too
soon to tell, but in the immortal words of the late great Eric Morecambe, I
think the short answer is probably “Not a lot!” 

Much was
understandably made by the Government of their new £250million FirstBuy shared
equity scheme, designed to help hard-pressed first time buyers get onto the
property ladder. However, since it only applies to new-build properties, it will
do nothing at all to help boost sales of “second hand” or resale homes. Besides,
it is calculated that it will probably only help a maximum of 10,000 first time
buyers, before the funds run out – which is little more than a drop in the
ocean. 

Of course, new build can
still represent an exciting opportunity – but only at the right price. So, my
advice to all buyers – be they first-timers or not – is to do your homework
thoroughly before making an offer and look at the second hand equivalent house
to give you some evidence. Nevertheless, you should still expect the new one to
be a little dearer, because like a car you will have to pay a “new premium” –
often around 5%. 

As for other Budget measures…the
decision to keep Stamp Duty at zero for first time buyers on properties up to
£250,000 for a further year is to be welcomed – although any feelgood factor
generated by this will to an extent be offset at the other end of the scale by
the new 5% rate on properties over £1million. 

In summary then, plenty of people will argue
that the Chancellor could have done a lot more to support the property market. And
in theory, he could have done – for example, by embarking on a long-overdue
revision of the entire Stamp Duty system. Whether he ought to have done,
however, is a very different question – after all, the housing market doesn’t
exist in a vacuum. In fact, all in all, given the wider economic realities, I
suspect he did as much as he prudently could. Which, as I said at the start,
was not a lot! 

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