The Property Market in Light of the 2012 Budget

by Mark Johnston

The state of the economy and public finances has not changed much since November 2011.

Chris Keates, general secretary of the National Association of Schoolmasters Union of Women Teachers (NASUWT), said that the recent budget showed the government was ‘out of touch with the lives of ordinary people’.

This year’s budget has given no respite on the public sector pay freeze, which is still causing misery for millions of dedicated and committed public sector workers.

However, the chancellor George Osborne did confirm that properties sold for more than 2 million will soon be subject to a new 7% stamp duty tax.

The chancellor said of this decision that ‘those who bought the most expensive homes should contribute more’.

Less than 0.5% of homes in Britain will be affected by the increase in the stamp duty rate for multi-million pound homes, according to Lloyds TSB.

Some believe therefore that this tax is merely a tax on Londoners.

Experts believe however, that the chancellor has missed an opportunity to reform the whole stamp duty rather than just tampering at the edges.

He also added that he intends to tackle tax avoidance, especially when people bought homes.

Nicholas Leeming, business development director at zoopla.co.uk, stated “it is difficult to argue against a clamp down on stamp duty avoidance as, for the vast majority of people, stamp duty is an unavoidable truth that comes with the territory of homeownership”.

So far the government has spoken about finding ways to combat the increasing problems of a generation unable to join the housing ladder.

But it seems though that on a whole any help for the first time buyer was notable absent from this particular budget statement and therefore very little has been done again to cure the paralysis at the bottom end of the market.

Many experts believe that to get the market moving again home owners across the whole market need the confidence to sell their homes and also first time buyers need encouragement to once again climb on to the property ladder.

However, there were no announcements made to support the UK’s fragile property market as such.

Wendy Evans-Scott, president of the National Association of Estate Agents (NAEA), said “this budget has provided a double whammy for first time buyers: not only has the chancellor failed to offer any real help to lower and middle income home owners and first time buyers, but from Saturday the stamp duty holiday will come to an end”.

The only good thing it seems that has come from the budget was the increase in the personal tax allowance.

This will mean that some people will have more money in their pocket, so those keen to get on to the housing ladder could potentially save for a deposit more quickly. However, it is unlikely to have a huge impact on the housing market because at best it will only shave off a few months of savings, not years which is really needed.

David Orr, chief executive of the National Housing Federation (NHF), said “it is disappointing that the chancellor has failed to put investment in housing at the forefront of driving forward economic growth in the UK”.



Story link - The Property Market in Light of the 2012 Budget

Related stories to : The Property Market in Light of the 2012 Budget