Budget 2013 – Property Market Comment
Alex Mackay of Mishon Mackay considers the impact the 2013 Budget may have on the residential property market.
The British public are serious about housing. They are serious about looking at it, choosing it, buying it, improving it and, when the time comes, they are serious about selling it. It is a national obsession.
Sadly, successive Governments don’t seem to have been quite so serious or obsessive as the electorate and, thus far, the coalition’s behaviour has been little different. Over the past few years there has been a number of lacklustre housing initiatives which have not effectively managed to stimulate a sector stubbornly refusing to rally much from the banking crisis.
The 2013 Budget had few real headlines. But at least housing was a major feature. While no new real initiatives were announced, alterations to existing measures did catch the eye: £3.5bn in capital spending over three years to shared equity loans and a loan of up to 20% of a home’s value to be offered to people looking to move up the housing ladder. It remains uncertain whether these measures will be enough in themselves. It is confidence that really stokes the property market, not rhetoric or spin, which can never replace the essential drivers of personal desire, affordability and the tantalising promise of a good investment return.
Time will tell if these new measures will be enough. Meanwhile the market continues to improve in some areas better than others. London and the southeast lead the way with foreign buyers targeting the capital as a safe haven for their money – London being better than Cyprus for investment just now! With the added benefit of a falling pound this seems set to continue and has the potential of helping to lift London prices further still through the year. In other parts of the country it is the local economies that will affect the regional housing markets. So the Chancellor’s Budget measures for regional enterprise, personal tax and small businesses may provide an extra welcome stimulus.