Business as Usual
Marc Cox of Mishon Mackay takes a look at the 2014 Budget and considers how it may affect the property market.
Blame or applaud whomever you like for the surge in the property market across most of the UK – but a surge is what we have. Whether it is foreign investors in London, the government’s help-to-buy scheme or greater confidence following month after month of lower unemployment and higher growth, the property market is following its familiar path of post-bust recovery with the ripples radiating from London. Of course there are those who still manage to blame estate agents for rising prices – but even these people must concede by now that greater forces are at work than just the aim of estate agents to get the best for their clients.
The 2014 Budget did nothing to derail this recovery but did little to accelerate it either. The new homes sector will receive support for building more than 200,000 homes. The help-to-buy scheme extended now to 2020 indicates that both Treasury and the Bank of England have little fear of this measure helping to cause a housing bubble. Nor will a new 15,000 home garden city at Ebbsfleet do much to alter the housing picture overall – however exciting the first of these cities in 100 years may be. Some people may rue the closing of the loophole that made it advantageous to buy property over £500,000 through a company. These properties will now be liable for 15 per cent stamp duty. Finally, those that face the uncertainty of flooding may take a little consolation from the extra £140m for flood defence repairs made in this Budget – although that figure might not seem very much when weighed against such an intractable foe.
So the Budget will be pored over by many more than just those in the property industry this time round. Property has been left to find its own way and by-and-large that is how it usually is.