Fresh calls for government to support the housing market

Ahead of the budget at the end of the month, fresh calls are being made to the government to support and stimulate the UK property market.

Related topics:  Property
Warren Lewis
18th October 2018
Gov 99

Mark Readings, Founder and Managing Director of, House Network, explains why the 2018 budget announcement on the 29th October 2018 is so significant to the property market.

Brexit and the increased stamp duty are being blamed for a steep downturn in the housing market in London and the south of England, with slow and stagnant growth across the rest of the UK. The recent changes in taxation and a lack of consumer confidence have resulted in a drop in demand for prime properties, especially in the capital as the appeal to overseas buyers has been reduced.

“The government needs to support and stimulate the property market, not only for first-time buyers but for those existing landlords and international investors.”

First-time buyers in London are not able to take advantage of stamp duty exemption, as the average property price in the capital is above the £300,000 threshold. Help-to-buy schemes which were introduced to support these first-time buyers has not provided any benefit as they are only available on new build properties, up to the value of £600,000 and individuals are later faced with huge amounts of repayment interest after the five years interest-free loan expires. If we don’t have people buying at the bottom of the market we do not get a movement through the mid and upper levels.” - says Mark Readings.

Individuals purchasing a second property are being penalized by paying an average 5% in stamp duty for properties in London, and 8% on buy-to-let properties. The recent rumours of a new policy to exempt existing private landlords from capital gains tax, if they sell their buy-to-let properties to sitting tenants, is positive. It will not have an immediate impact on house sales, and the tenants would need to have been renting the property for three years, but it is a way for landlords to release capital which is what the property market needs. The introduction of this new policy could eventually create more supply in the market.” - Mr Readings continued.

The property market is largely dominated by economy sentiment and, as recent political uncertainty has decreased this confidence, the government needs to take measures in the budget to prevent any further uncertainty. The major cities have been the hardest hit so many investors will seek alternative locations if the government continues to make properties less appealing for international and UK landlords.” - Mr Readings concluded.

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