Now that voting has finished and we know the future direction of the country, we thought it would be helpful to take a look at how these results are going to impact both property owners and landlords.
Providing some certainty
Since the EU referendum back in 2016, a cloud of political uncertainty has been hanging over the property industry, making people reluctant to sell or buy without any great clarity on what the future holds. This has been backed up by home moving data, as well as anecdotal evidence from agents.
A greater home ownership pledge from the Conservative party
Some of the party’s campaign was fought on the premise that there should be a greater level of home ownership, and it would be great to see politicians working closely with the industry to make this a reality. Some of policies the Conservatives Party has announced include
- 3% increase in Stamp Duty for overseasbuyers of UK property: This would be in addition to the Capital Gains Tax for overseas owners of UK properties introduced in recent years, which has been extended to now apply to UK properties owned via overseas companies and also to commercial properties sold by overseas owners. It is no longer possible to buy or sell property in the UK without a potential tax liability. For overseas owners, disposals need to be reported as they are made and any capital gains tax paid over at the time.
- The Help to Buy Scheme is scheduled to continue until 2023 and presumably will probably continue as originally planned under a Conservative Government.
- Shared ownership with Housing Associations: outline plans were included within the Conservative manifesto to encourage shared ownership with Housing Associations, enabling equity to be bought in smaller amounts (currently equity is structured through 10% chunks, whereas it is proposed that 1% shares would be able to be bought to make this more affordable for first time buyers).
- Funding purchases: The Help to Buy ISA has now closed to new accounts, but Lifetime ISA’s remain available for those looking to save deposits for properties. These were not as widely available as the Help to Buy ISA’s but may well become more popular now that the other has ended.
- Lifetime Fixed Rate Mortgages: One of the later pledges in the election campaign was to look to introduce lifetime fixed rate mortgages with a 5% deposit required, but whether these prove to be financially viable to guarantee, or whether they are attractive to borrowers is not yet apparent.
- Lifetime Rental Deposits: For those in private rental properties it is proposed that deposits will be transferrable directly from one property to another, saving time and costs in releasing deposits and then lodging these with new landlords.
Although some of these policies might not make it through Parliament and none of us can see into the future, the one thing we know for sure is that the elements of political and Brexit uncertainty have now been removed so if you are looking sell or rent your property in the New Year we would be happy to help.