There were a number of key points to take away from the Autumn Statement – one of them being the boost to the housing budget and the developments that will follow. We’ll take you through what was outlined in George Osborne’s speech in relation to housing and what this could mean for you.
One of the first points that the Chancellor was eager to make in terms of housing was that the housing budget is to double to over £2 billion per year. As part of this, the government aim to build 400,000 affordable new homes by the end of 2020 – with George Osborne reiterating in his speech ‘‘we are the builders”.
Half of these homes will be Starter Homes to be sold at 20% off the market value to young first time buyers – this means anyone under the age of 40. Another 135,000 will be brand new Help to Buy shared ownership homes.
Shared ownership is designed for people who would struggle to buy a home outright. The scheme allows you to buy a share of your home through a housing association and pay rent on the rest of the share. You can usually buy 25% to 75% of the home’s value. Under these new changes, you’ll be able to buy a home through shared ownership if your household income is less than £80,000 or £90,000 inside London.
A new Help to Buy scheme was outlined for the capital as well, designed to address the high cost of living in the city. This will enable Londoners with a 5% deposit to get an interest-free loan worth up to 40% of the value of a new home.
The Chancellor also announced a new tier of stamp duty in the Autumn Statement. This means that from April next year, anyone looking to buy a property as a buy-to-let landlord or second property will have to pay 3% more in stamp duty. If you’re not familiar with what stamp duty is, it’s a tax payable on most property purchases in the UK.
Say you are a landlord looking to buy a property worth between £125,000 and £250,000 to rent, you’ll pay 5% of the cost of this property on stamp duty rather than 2% from April next year. The Chancellor justified this increase by saying it’s a way to “back families who aspire to buy their own home” by discouraging landlords from buying up affordable housing.