Property at centre of Government growth strategy

budget 2013Chancellor George Osborne has put the property market at the heart of the Government’s plans for economic growth.

In this week’s Budget he unveiled two schemes aimed at getting the sector moving positively once more.

The Help to Buy scheme will allow all purchasers to put down a 5% deposit on a newly-built home from April.

A maximum of 20% of the cost of the home will be funded by a shared equity loan, financed by the Government. This will be interest-free for the first five years.

The second measure is the new Government mortgage guarantee scheme which will run for three years from the start of 2014.

It will be used to support £130billion of mortgages for old and new homes.

Ian Fletcher, director of policy at the British Property Federation, said: “This is a strong package of help for housing. Annual transactions are half what they were and that has a knock on consequences for all those parts of the economy that rely on people moving. Helping people needing a deposit has for some time been cited as the missing piece of a coherent housing policy and is therefore welcome.”

Stephen Noakes, Mortgage Director at Lloyds Banking Group, said: “We are very supportive of innovation in the housing market and believe that the mortgage guarantee scheme, will give a much needed boost to the housing market and most importantly address the issue of accessibility.

“Since the launch of the Government’s Funding for Lending scheme we have seen mortgage rates hit an all-time low, really making a difference to affordability. These proposals will, just as importantly, address accessibility, and provide a genuine solution to the challenge of raising a deposit. Working together these two schemes will get more people on and moving up the property ladder.

“Crucially, this scheme will not only help first-time buyers but also second steppers, a key segment of the housing market that is also in need of more support and attention. Our recent report from Lloyds TSB indicates that little has improved in the past year for those first-time sellers looking to take the second step on the housing ladder, almost two-thirds of second steppers had wanted to move up the ladder in 2012 but were unable to. Raising a deposit has been cited as one of the key challenges. While the property market is likely to continue to be challenging, the fresh support announced [today] will have a real knock on effect across the whole of the housing market and we expect it could help around 50,000 people a year.”

Nick Kennett, Director of Financial Services at Post Office said: “[Today’s] Budget gives potential homebuyers reasons to cheer, whether buying their first home or looking to move. The Chancellor’s ‘Help to Buy’ scheme is just what is needed to get the country moving.”

Source: propertytalk Live!
 
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Budget 2012 – Chancellor cuts 50p top tax rate

British Chancellor George Osborne has announced that the Government is to reduce the controversial 50p top rate of income tax to 45p from April 2013.

But his Budget has taken a swipe at the wealthy in a series of other tax and anti-avoidance measures.

Justifying the end of the 50p top rate of income tax paid on earnings over £150,000, Osborne said it damaged competitiveness and had only raised a third of the £3billion expected.

Instead, five times as much would be raised from the very rich by other policies in the Budget.

New “anti avoidance” tax rules would tackle the “morally repugnant” practice of people not paying the tax that they should.

Most notable of these is the plan for a staggering 15% stamp duty charge levied on people who buy expensive homes using offshore companies.

Individuals buying property costing more than £2million will also pay a new rate of 7%, up from the current 5%.

At the other end of the scale, the threshold at which income tax is paid – £8105 from next month – will rise to £9205 in 2013.

Osborne’s outlook for the economy in general saw the growth forecast for 2012 rise marginally from 0.7% to 0.8%.

He also said the Government was “on course” to eliminate the structural deficit by 2016-7.

And, while the UK was expected to avoid a “technical recession” the euro zone and oil prices remained a threat.

Unemployment is expected to peak this year at 8.7% before falling.

Osborne said it was a “Budget that rewards work”.

“Britain is going to earn its way in the world,” he said. “There is no other road to recovery.”

Source: Investor Today
 

ARLA calls for tax breaks for private landlords

The government should support growth in the private rented sector and remove barriers to further investment, says the Association of Residential Letting Agents (ARLA).

In a Budget submission to chancellor George Osborne, ARLA calls for landlords to be treated as entrepreneurial businesses for capital gains tax purposes, so that they can enjoy the same tax reliefs as other firms.

At the moment some landlords face bills of 28 per cent when they sell a property, which ARLA says prevents them reinvesting in the market.

It wants the government to allow landlords to take advantage of the roll-over relief available to other businesses and only charge capital gains tax on gains released from the business as a profit.

ARLA also wants the reform of stamp duty to remove the slab structure that it says unfairly distorts the market.

Ian Potter, operations manager at ARLA, said: “Demand for private rented housing continues to grow with 3.4 million tenants living in the private rented sector, an increase of over one million tenants since 2005.

“The tax system can be used by the government to incentivise investment in housing stock in the private rented sector and therefore improve the conditions in which those 3.4 million tenants live.”

Source: aboutproperty.co.uk