Housebuilding and homeownership
Housebuilders have become hooked on the government’s help to buy scheme: Figures by the Department for Communities and Local Government show the help to buy scheme has been responsible for selling £17.7bn of properties, with over 100,000 people taking out loans under the scheme. More than 50 per cent of sales at Persimmon, the UK’s largest housebuilder, are under the scheme; the figure is above 40 per cent for Taylor Wimpey, Galliford Try and Redrow. So with potential changes abound for the scheme, this could pose real issues for housebuilders. Read more.
Manchester closes gap with London on BTL: Manchester has dramatically narrowed the gap with London as a buy-to-let hotspot after a barrage of tax and regulatory changes deterred landlords from investing in the capital. Read more.
The case for stamp duty reform: More than one million older people could downsize if there was no levy, found YouGov research for homebuilder McCarthy & Stone. The Taxpayers Alliance and the Institute for Economic Affairs have both echoed this call. Read more.
The London School of Economics has published research of its own that suggests stamp duty reduces the rate of home moving by nearly a third and meant that large homes were not being freed up for young, growing families. Read more.
The additional rate is catching out many home-movers who are forced to pay the levy if they purchase a new home before selling their old one. While they can apply for a refund, it’s been argued by many property market experts that being forced to pay the additional rate upfront is causing real difficulties among buyers who aren’t able to put that money towards the new property or other related costs. Read more.
Cabinet minister lobbies on stamp duty reform: An unnamed cabinet minister is reported to have put the case to the Chancellor that stamp duty must be reformed to unlock mobility and economic growth in the UK’s stagnant housing market. The comments were seconded by former Chancellor Lord Nigel Lawson, famous for slashing the tax burden on homeowners in the 1980s. Read more.
Markets and business conditions
Bank of England lowers forecasts for housing transactions: The Bank of England’s latest inflation report forecasts mortgage approvals for house purchase to average around 66,000 per month, down from 71,000, between now and the first three months of 2018. The Bank also predicts that the Halifax and Nationwide house price indices will show average house prices increasing by a little less than half a per cent per quarter, down from half a per cent. Read more.
Property market cooling according to Savills: Commercial property transactions are holding their own, while residential property transactions are slowing, according to the real estate agency Savills. The firm puts the decrease in transactions down to stamp duty changes in 2016, but warns that political uncertainty makes it difficult to predict future conditions. Read more.
UK house prices still showing growth despite rising at the slowest rate in four years: The average price of a home in the UK has hit £219,000, according to the latest figures from Halifax. London house prices remained the highest in the country despite the sluggish market, with long term prices rises in the capital almost double those seen in the rest of the country. Read more.