Mail Online UK: Who are the winner and losers of the new housing proposals announced in George's Osborne's Autumn Statement?
Fri 27 Nov 2015
First-time buyers get an extra 2.3billion towards Starter Homes From April 1, 2016, anyone buying a flat orhouse to let out must pay a 3% stamp duty surcharge London Help To Buy offers Londoners a 40% interest-freeloanBranded the biggest affordable house-building programme since the Seventies, its how David Cameron andGeorge -Osborne hope to solve the countrys housing shortage. But how will the new housing proposals in thisweeks Autumn Statement change the lives of people in Britain? And who will be the winners and losers?
On the ladder: First-time buyers are being given a helping hand to achieve their dreams
First-timersThe good news for this group is in the shape of an extra 2.3billion allocated by the Chancellor to thepreviously-announced Starter Homes Initiative (SHI). This allows first-timers aged under 40 to get a 20 per centdiscount on new build flats and houses to a maximum of 250,000 outside London and 450,000 in the capital.
But the homes wont be available quickly - developers are only expected to identify the first sites from nextspring.
However, first-time buyers can get a slice of the action created by a 4billion cash injection to fund 135,000 extrashared ownership properties - these are where individuals buy 25 to 75 per cent shares of a home and pay renton the rest. These homes are aimed at households earning under 80,000 outside London and up to 90,000 inthe capital - higher than the previous earning thresholds for shared ownership.Buy-to-let investorsTheres bad news for amateur property investors. From April 1, 2016, anyone in England or Wales buying a flat orhouse to let out must pay a 3 per cent stamp duty surcharge. This aims to raise up to 880million by 2021 tospend on first-time buyer homes.
For properties worth between 125,000 and 250,000, where stamp duty is now 2 per cent, buy-to-let landlordswill pay 5 per cent.
More specifically, todays average buy-to-let flat costs 184,000 - so a buy-to-let landlord must pay an extra5,520 when buying from April next year. -Ironically, professional investors with more than 15 buy-to-letproperties, are exempted. The idea has gone down like a lead balloon in the rental sector, already reeling fromthe removal of some landlord tax breaks by the Chancellor in his July Budget.
Comments from lettings organisations suggest the extra purchase costs will be recouped by higher rents.
The biggest losers are tenants who will now find it even harder to get the accommodation they want at a pricethey can afford.The extra stamp duty on buy-to-lets will exacerbate an already serious shortage of properties inmany areas, reducing choice and driving up rents, warns Alan Ward, chairman of the Residential LandlordsAssociation.
Buy-to-let purchases now make up 15 per cent of all housing deals, so analysts fear this may lead to a market dipnext spring when the new duty kicks in.
LondonersUntil now, Help To Buy, the Governments loan scheme, has rarely been used in London because prices are sohigh - a typical home in Greater London costs about 520,000 - but thats about to change from April. Thats whenthe London Help To Buy equity loan scheme kicks in. It is similar to the existing national initiative, exceptLondoners can borrow up to 40 per cent of the homes value instead of 20 per cent.
Theres no age limit on applicants, but you must contribute at least 5 per cent as a deposit and be able to securea mortgage for up to 55 per cent of the homes cost. Theres a top price of 600,000 for the home, which must bein a London borough.
With rumours that interest rates might rise earlier than expected, this will help thousands realise their aspirationsof getting on the ladder, says Peter Rollings, of London estate agency Marsh & Parsons.Second homebuyersMore bad news - these buyers, too, will be hit by a 3 per cent stamp duty surcharge if they buy in -England orWales after April 1. You can snap up that dream cottage in the country beforehand, of course, but experts advisebuyers to bargain hard if estate agents and sellers exploit the situation by pushing up prices.
Buyers need to be careful that expected price falls after April dont wipe out the duty savings they make byrushing to buy now, warns Ray Boulger, of mortgage broker John Charcol.
Housing Association TenantsFive housing associations are from this week permitted to pilot the extension of the Right To Buy scheme, abrainchild of Margaret Thatcher which, until now, applied only to council tenants. Residents of the fiveassociations - L&Q, Riverside, Saffron Housing, Sovereign and Thames Valley, mostly in London, southern andeastern England - can immediately discuss buying their homes with the size of discounts depending on how longthey have lived in them. If the pilot works well, the same principle will be rolled out to housing associations acrossBritain next year.On the market...with the Autumn Statement in mind
If you buy this 530,000 thatched three bedroom cottage in Saffron Walden as a holiday home now, you beatnext April's 3 per cent Stamp Duty surcharge. It has a third of an acre and dates back to the 17th Century.
This four bedroom new build house in Exeter has a double garage with driveway and open-plan triple aspectliving room, plus a contemporary fitted kitchen. It is on the market for 575,000.
This is perfect for letting out - but would-be landlords must buy before April to beat the stamp duty surcharge. It'sa Victorian former railway workers' cottage with two bedrooms in Grateley, with a price tag of248,