The Chartered Institute of Housing (CIH) produced a useful briefing this week on the Budget and its implications for housing.
The Briefing noted that levels of house building are currently at their lowest in peacetime since 1924. Writing for CIH, the columnist from The Times, Oliver Kamm said:
‘The Budget was an attempt to set out a strategy for growth, alleviating the pressure on standards of living, while not adding to the budget deficit. The main component affecting the housing sector was the shared-equity scheme to assist first-time buyers. The measure is symbolic rather than practical, in that it is limited to new homes and the numbers are few. More broadly, the main economic effect on housing will be monetary policy, and the government’s deficit-reduction plans are designed to keep long-term interest rates low. It’s a difficult balancing act, and the prospects for the housing sector seem to me largely unaffected by the Budget, and not at all promising.’
Measures announced in the budget did, however, include tax incentives to stimulate the supply of private rented accommodation that could help investors in Buy To Help.
The Government announced two tax incentive measures designed to stimulate the supply of private rented housing. These are:
- The stamp duty land tax rules for bulk purchases of residential property will be reformed so that if the buyer chooses, the rate will be determined by the mean value of the dwellings purchased (subject to a minimum rate of 1 per cent), rather than their aggregate value as is currently the case.
- Subject to informal consultation, the Government will legislate in Finance Bill 2012 to support good business practices and remove barriers to entry, and investment in, the REITs regime, including removing the REITs 2% conversion charge.
A full copy of the CIH Briefing Note can be found here »
We’ll be looking into these measures in the coming weeks to see how they affect Buy To Help investors.
Download the brochure »