Chancellor Alistair Darling disclosed measures designed to help those struggling to get onto the housing ladder and hard-pressed mortgage holders. Consumers are increasingly feeling the pinch from the global credit crunch, following an end to cheap credit, and rises in household mortgage repayments, food, fuel and council tax.
Despite massive lobbying from the property industry, stamp duty hardly got a mention, though it's full steam ahead for the Capital Gains Tax reform announced in the pre-budget report. Here is the impact of Alistair Darling’s first budget on the property market:
• Buyers who venture into shared ownership schemes won't have to pay stamp duty until they own 80 per cent of the property.
• Key workers who own only 50 per cent of their home under a shared ownership scheme will now be able to borrow money against their property.
• Buyers should have more opportunity to take out long-term fixed-rate mortgages. The Treasury has published an accompanying report on this subject.
• Capital Gains Tax at a flat rate of 18 per cent will go ahead from April.
• Non-domicile residents will face an annual £30,000 tax as from April, but with no further plans to alter the tax in this Parliament or the next.
• A review of public sector land will be carried out to identify sites for 70,000 new homes, these to be part of the 3 million to be built by 2020.
• Next year there will be26 million funding for a Green Homes Service to help people cut their carbon footprint and their fuel bills.
• Energy companies to be encouraged to give a fairer deal to the 5 million customers on prepayment meters.
• People over 60 will have their winter fuel allowance raised from £200 to £250. Those over 80 will have it raised from £300 to £400.
Darling said 70,000 new affordable homes will be built per year by 2010/11 and share equity schemes for key workers, such as teachers and nurses, and first-time buyers will become available to those who can afford half the value of a property, as opposed to the current three-quarters.
On affordable mortgages, the Treasury will consult with industry on 10, 20 and 25-year fixed-rate mortgages. "Long-term fixed rate mortgages can reduce some of the risks of taking out a mortgage, especially for first time buyers and lower income families," said Darling. "And it will help more people get on - and stay on - the housing ladder."
