Tag Archives: government
UK buyers have saved almost £2 billion since stamp duty change a year ago
Buyers in the UK have collectively saved £1.9 billion since stamp duty was reformed in December last year, according to new research. An analysis of the figures by conveyancing services firm My Home Move says that buyers saving an average of £1,500 each since the reforms. Stamp duty reforms which were announced on 04 December 2014 abolished the old slab system of stamp duty and benefited anyone purchasing a home priced under £937,500. The firm also said that a recent poll of estate agents showed that 87% said that last year’s stamp duty changes have had a positive impact on the market. According to Doug Crawford, chief executive officer, the big winners from the changes have been the first time buyers and second steppers who have really struggled from price hikes due to a lack of housing stock. ‘Cheaper stamp duty bills don’t fix all the problems facing these buyers, but they do help by making it easier to save for a deposit,’ he said. He pointed out that the old slab system was ripe for reform as it was creating a stranglehold over the market, especially where property prices neared the stamp duty thresholds, and in particular around the £250,000 mark. ‘Home buyers have benefited from the significant stamp duty overhaul during the last 12 months with each buyer saving an average of £1,500, a much needed boost for those struggling to get on the housing ladder as prices have risen by 6% during the last year. Thanks to the reforms, people are now able to sell their homes for a truer value,’ Crawford explained. ‘However, as with all reforms there are those who have lost out from the changes. There are a small minority of buyers who are looking for luxury homes or expensive London properties which now command up to 12% in stamp duty,’ he said. ‘With a slowdown now being felt towards the top end of the market, it could cause a worry for the Government as receipts from stamp duty start to fall. However, following last week’s announcement of a 3% stamp duty surcharge for buy to let investors, any deficit could be offset from April,’ he added. Continue reading
Review of British development tax welcomed by property industry
The British property industry has welcomed a government review of one of the country’s biggest bugbears in the planning system. According to the Property Federation (BPF) the relook at the Community Infrastructure Levy (CIL), a development tax which is used to fund local infrastructure, is long overdue. The organisation, which is supportive of CIL in principle, has long advocated a review of the tax and says that it has become overly burdensome and inefficient. The BPF says that the review must not be the end of the story. In some cases, the evidence base used for the initial CIL setting is now fully out of date, and not fit for purpose. It is crucial that local authorities are encouraged to regularly review their own charging schedules against market signals and to test them against ‘real life’ projects that reflect market conditions. It pointed out that CIL simply does not work for complex or large scale strategic sites, and a more site specific and targeted approach to infrastructure funding and other contributions must be taken. It also wants to see clarity between CIL and s106. A fundamental premise of CIL was that it would be used to fund a set of identified infrastructure requirements, whilst s106 obligations should relate only to site specific mitigations and affordable housing provision. However, in reality, this has not happened, and there is considerable overlap between the two. This fundamental issue must be addressed and clarity provided in order for CIL charge setting to be at the right level and to make the process work properly. It is also calling for the integration of CIL with local plans. There is a disconnect between the preparation of local plans and the formulation of CIL charging schedules, which local authorities should prepare in tandem, in conformity with the National Planning Policy Framework. It is critical that emphasis is placed on delivery of infrastructure, rather than just revenue collection, it adds. ‘Many of our members cite CIL as one of the biggest bugbears of the planning system, and there are plenty local authorities who would agree. Whilst some would like to see it abolished altogether, we believe that with the right changes, CIL could be a useful tool for ensuring infrastructure delivery on development sites,’ said Melanie Leech, chief executive of the British Property Federation. ‘The creation of this group is a step in the right direction, but it must not stop here. It is crucial that Government take any recommendations on board, and works with both public and private sectors to ensure that the regime really works in the future,’ she explained. ‘CIL was supposed to provide a quicker, fairer and more efficient way of delivering infrastructure to support development and our members have always supported this principle, but we are concerned that in many places it is not working. We look forward to engaging with the review panel to ensure that CIL becomes less of a burden and more… Continue reading
More needs to be done to boost UK’s new Help to Buy ISAs
The UK’s new Help to Buy ISAs are a step in the right direction, but much more must be done to help people renting taking their first step on the property ladder, it is claimed. According to Kevin White, head of financial planning at independent financial advisory group deVere, it is effectively free cash from the government and anyone who wants to buy their first home should take advantage. The new ISAs are available from 01 December and will enable first time buyers can save up to £200 per month and the government will add 25% on top of the savings. Savers need to save at least £1,600 to get the minimum bonus of £400. The most savers will receive the bonus on is £12,000, meaning £3,000 for five years of saving. ‘The overwhelming majority of Britons dream of owning their own home and this is a hugely positive step in the right direction to help people get on the property ladder,’ said White. ‘However, even with the maximum HISA saving plus the government bonus, meaning a total of £15,000, most first time buyers will still find that they’re £15,000 short for the average deposit,’ he explained. ‘With this in mind, much more must be done to help Generation Rent achieve their financial goals. Too many people in their 20s and 30s are desperately keen to leave their rented accommodation and/or their parents’ home and to buy a place of their own but simply can’t afford to do so,’ he added. He believes that the government, the financial services industry and consumer groups must unite to reignite the savings culture so that saving once again becomes Britain’s social norm. ‘It is our experience that many people do indeed want to save but are not in a financial position to put money aside. We believe this could be helped to be turned around with a three-pronged approach,’ said White. ‘First, we would urge the government to create a comprehensive savings charter. Government needs to make saving worthwhile by, for instance, offering more proper incentives, such as the HISA, and reversing existing and planned tax raids on pensions,’ he pointed out. ‘Second, the financial services sector could do more to help people get more from their savings. For example, it could make it easier to switch bank accounts, and also develop new, accessible and simple-to-use financial products and solutions to give today’s young people more options. ‘And third, we need the government, the industry and consumer to work more cohesively to educate people on the real importance of saving. We need to highlight the value of long-term security over short-term gratification,’ he added. He also pointed out that savings give people a buffer when things go wrong, they act as protection, and they also give people more life opportunities. ‘On a wider scale, a society that… Continue reading
