What with mansion taxes, stamp duty and endless debates over house price rises, the headlines have been packed with property stories throughout the year.
This is because property is such an essential part of the economy and matters a lot to people on a very personal level. People like to hear that they’ve a valuable asset and house prices play a big role when it comes to the feelgood factor, as does housing policy.
Here are a few of the big stories that hit the headlines during 2014…
Three months into the year and it was Budget time again. Chancellor George Osborne pledged £0.5bn of finance for small house building firms and extended the Help to Buy equity scheme until 2020. This was designed to get first-time buyers onto the property ladder and give second-time buyers more leeway to purchase a larger property.
Osborne said he wants to create an additional 200,000 new homes and that he’ll provide £150m of finance to help give people the Right to Build their own properties.
He also extended the application of the annual tax on residential properties held by corporate vehicles. And from April 2015, properties worth over £500,000 that are purchased through a company will be subject to 15% stamp duty.
There were two big stories this month: the Scotland vote and Labour’s announcement at its conference that it will introduce a mansion tax if it gets into power next May.
Regarding Scottish devolution, it was predicted that house prices in London would rise if the Scots voted to leave the 307 year Union, but luckily they didn’t. So no sterling crashes, business exoduses to London or any other of the dramatic predictions making the rounds in the media. As to how powers will be allocated to Scotland remains to be seen and it’s still uncertain how the tricky matter of English devolution will also be managed. We wrote about this here.
In terms of the mansion tax, Shadow Chancellor Ed Balls announced during the party’s conference that he would introduce an annual levy on properties worth more than £2m. We believe this could be problematic and would likely lead to costly tribunals, be expensive to implement and inevitably mean that properties would cluster around the £1.9m mark. Here’s more on the subject here.
December means the Autumn Statement, and this month there was a big surprise in the form of stamp duty reform. The levy has finally been changed and the ‘slab’ nature of the tax altered. Since 3 December, some 98% of sellers have benefited from the new rates, with only those who own properties worth more than £937,500 being adversely affected. However, we think that this is unfair for those with relatively modest, yet expensive properties, in London and the South East. Have a read what we think here.
Oh, and just one more thing: interest rates didn’t rise this year, despite some experts predicting that they would. We think they’ll be a rise next year, which is likely to be another big year in terms of housing policy with a General Election coming up. We’ll be here with further analysis and updates every step of the way.
Have a great Christmas and New Year!