A raft of measures surrounding future home ownership in the UK have been announced by chancellor George Osborne in his latest Autumn Spending Review. Outlining plans to create thousands of new residential properties across the length and breadth of the country in the years ahead, the chancellor has set aside more than £6.9 billion for future housing projects.
Paid for through significant government departmental savings and a planned reduction in the UK`s welfare bill by the end of this parliament, the chancellor hopes the new measures will serve to address ongoing housing shortages that continue to push up average property values at an unsustainable rate. A total of £2.3 billion is to be invested into the government`s new Starter Homes scheme, which will provide discounts of up to 20 per cent on the market value of these properties for first time buyers.
Meanwhile, £4 billion has been made available to the UK`s housing associations and local authorities to build more homes for shared ownership. A further £200 million will be used to build new homes for rent, which will allow tenants to save for a deposit, while a new pilot scheme to trial the government`s Right to Buy programme for housing association tenants has also been created.
In addition, the government`s ongoing Help to Buy (equity loan) scheme has been extended until 2021. It will therefore run for one year longer than originally planned, due to the popularity that the initiative has garnered to date. Changes in the buy to let segment will also see the introduction of a new three per cent stamp duty surcharge for all those buying second homes and homes to let across the UK. At the same time, changes to capital gains tax mean that individuals selling a property within 30 days of purchase will now face additional costs.
It is estimated that this additional tax on the rental sector will raise an extra £1 billion in Treasury revenues by the end of the decade. Responding to the changes, director general of the Council of Mortgage Lenders Paul Smee stated that the delivery of an increased supply of new homes will be highly beneficial for the nation in the years ahead.
However, he added that the cumulative effects of the impact of new charges in the buy to let segment must be closely monitored so as to avoid any `unintended consequences`. This is especially important, he argued, due to the fact that more than one fifth of the population currently reside in rented accommodation.
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