NEWS

July 2010. Ruxton Partner - Nav Sharma writes:

Expectations remained high for home buyers as new Chancellor George Osborne rose to his feet in the House of Commons towards the end of June.
By the time he had sat down again there were a few disappointments but it is pleasing to note – when reading the fine print afterwards – that a number of promising aspects remain for those considering joining the housing market.
Perhaps the earlier announcement of the abolition of HIPs (Home Information Packs) proved one of the best stimuli to the market. About 20% more homeowners decided to market their properties in the four weeks after HIPs were scrapped compared with the previous four weeks, thus unlocking supply into a market that had been crying out for additional stock.

This first big housing policy change by the new Coalition Government was of course designed to boost activity and this appears to have worked.
Remember, though, that although HIPs are on their way out sellers still have to purchase an EPC – an Energy Performance Certificate. However this only needs to be commissioned, rather than obtained, before a property is put on the market, which should help to speed things up. It remains valid for up to ten years and covers a property’s energy use and CO2 emissions, as well as providing recommendations for improvements. Typical cost is around £70.

Beyond the abolition of HIPs it is pleasing to note (again in the small print!) that the Chancellor is clearly hoping to reinvigorate the housing market.

In 2008/09 £4.8 billion was collected in stamp duty. By 2015/16 he is predicting this to grow to £13.5 billion – a massive increase. This can only come about through increases in sales and property values and suggests that the banks will be encouraged to lend a great deal more than they are currently.

And whilst the Chancellor has half suggested that he may withdraw the stamp duty exemption for first-time buyers under £250,000 he did not, as feared, announce a VAT imposition on new homes.

Construction companies should see this as a sign from the Government that they must learn to work within the new planning rules and start supplying more affordable housing soon. If this policy works, of course, then it will attract more first-time buyers into the market – just what we need!

Finally, Mr. Osborne announced a regional growth fund for the years 2011 to 2013 to help English regions affected by reductions in public sector spending to “make the transition to private sector led growth and prosperity.”

This could well assist the Birmingham and Solihull region where, on average, homeowners have between 25% and 50% equity compared with, for example, the south east where the figure is between 60% and 70%.

So whilst on the face of it there did not appear to be an awful lot favouring the housing market in this Emergency Budget, the fine print provides a number of encouraging features which, along with the fine summer we are having, could be just the incentive to consider a move in the coming weeks!

 

Call us now on 0121 704 0100