30 November 2015
Autumn Statement will have significant impact on the South’s Property Market
Robert Dowling, Head of the Construction & Real Estate sector at Gatwick and West Sussex-based chartered accountants, Carpenter Box, made the following observations on the recent Autumn Statement:
“The Chancellor announced that there will be 400,000 new subsidised homes by the end of 2020. £4bn will be made available over the next four years to be offered as grants for shared ownership properties, which will help workers in the South get onto the property ladder. However, acquiring a part-stake in an average property particularly in the South will still require a deposit to be put down which will continue to make a new home unaffordable for some people.
The Chancellor also stated that £2.3bn would be available to directly fund new starter homes, which will be offered at a 25% discount to first-time buyers under the age of 40. Private developers in the South who build the subsidised homes are expected to benefit, however, even with the discount, the new homes remain unaffordable for those on average wages across the region.
A further announcement from the Chancellor related to raising the Stamp Duty Land Tax for landlords and second-home owners; from April 2016 investors will have to pay a 3% Stamp Duty surcharge. With such high property prices in the South, this measure will have a noticeable impact as Stamp Duty will, for example, increase from £1,500 to £7,500 on a house valued at only £200,000! This is a further measure that follows on from the Spring Budget which is intended to prevent restricted housing stock being consolidated into the hands of landlords and second-home owners.
Finally, the Chancellor pledged £73bn for road and rail projects over the next six years to April 2021. Although this will result in an increase in the capital spend available on projects across the region, there will be a reduction in the cash available for day-to-day spending. However, it will mean that the construction of HS2 linking the North and the South can begin and the £5bn announced for roads maintenance is welcome news”.