UK government’s new measures aim to encourage British people buy their first home. This is a summary of the main changes that will be introduced from April 1st, 2016.
£2.3billion budget to buy new build houses and flats
In the year to September, the average UK house price has risen by 6%, £286,000. British Chancellor George Osborne announced recently a bold plan to help homebuyers. First-time homebuyers under 40 years old will get a 20% discount on new build flats and houses to a maximum of £250,000 outside London and £450,000 in the capital. This is part of the £2.3billion allocated to the Starter Homes Initiative (SHI) to build 100,000 new homes.
In addition to this, 135,000 shared ownership properties (homes owned by individuals in a 25 to 75% and rented on the rest) have been funded with £4billion. These homes are for those households earning under £80,000 outside London and up to £90,000 in the capital. Elderly and disabled people will also benefit of a £400m pledge to build 8,000 specialist homes for them. This is the most ambitious house-building programme since the 1970s.
3% stamp duty for buy-to-let investors
The rental sector is not so happy, as English and Welsh buyers to let will have to pay a 3% stamp duty surcharge for properties worth below £125,000 and a 5% for properties worth between £125,000 and £250,000 (it is now a 2%). We should bear in mind that the average buy-to-let flat costs are £184,000, so the landlord will have to pay an extra £5,520 when buying next spring. Professional investors with over 15 buy-to-let properties are, however, exempted.
Buy-to-let purchases currently make up 15% of all housing deals, so experts claim this might lead to a market dip from April 1st when the new duty kicks in.
If you require help to buy a house in the Midlands or would like some advice from our estate agents in Birmingham to sell your own property, please provide our teams a call on 0333 344 7772.