FirstBuy scheme The government has allocated £250m, a sum to be matched by house building firms, for low-interest loans to first-time buyers wanting to purchase new build houses. Couples with a joint income of less than £60,000 and a 5% deposit will be eligible to apply for a further 20% of the property value towards their deposit. Loans are interest-free for five years and then charge around 1.75%, rising by 1% above inflation each subsequent year.


“I didn’t expect major improvements in tax saving measures because of the state of the economy but there are some nasty shocks still to come in April. That will impact affordability.”


John Malone, executive chairman, PMS


“First-time buyers currently pay an average deposit of £25,000, this would plummet to an initial £6,250 – a very appealing prospect. But it


won’t go beyond scratching the surface of the problem faced by the vast majority of first-time buyers.”


Nicholas Leeming, business development director, Zoopla.co.uk


Stamp Duty Land Tax The government will close three forms of SDLT avoidance and levy the tax on the mean value of houses being purchased within a portfolio, not the bulk cost.


product range in early April. And perhaps the biggest opportunity to boost investment by professionals comes from pension funds and insurance companies, which have a rumoured £1bn each to invest in residential property in London.


ReShapiNg the houSiNg maRket


Whether the tax change has the desired effect is a case of wait-and-see but it signals a shift in focus for the Treasury. Until now, housing minister Grant Shapps has trumpeted the virtues of homeownership and said we must fight


“This will help to promote a more sustainable and stable competitive marketplace and preserve the value of business already written.”


Trevor Matthews, chief executive officer, Friends Provident


to keep the rights of ordinary Britons to get on the housing ladder. But the government has done nothing


to support the rebuilding of the mortgage market since it imploded in 2007 - the way the vast majority of ordinary Britons achieve this ambition. Political gestures such as the £250 million shared equity fund for first-time buyers show the Treasury cares that voters think it cares that they can still get on the housing ladder. The industry en masse welcomed this fund but said, really, if we’re being honest, it doesn’t scratch the surface of the problem. The part of the market they’ve chosen


to support with a more meaningful fiscal change is the private rented sector. The obvious conclusion to draw is that it wants more people to rent: something conspiracy theorists the market over believe is very much the intention within government, the Bank of England and the FSA.


Only time will tell whether subtle rule changes such as this can move the market to more of a balance between home ownership and private renters. But it will be fighting against generations of UK citizens whose mantra has been, and still is, “My home is my castle.” n


mortgAge introducer APRIL 2011 27


“It’s important to establish whether this will be imposed purely on properties bought in bulk in a single location – such as a block of flats – or if it will include a situation where a landlord buys multiple properties in different locations.” David Whittaker, managing director, Mortgages For Business


“We hope this will help drive institutional investment, benefiting the housing market has a whole.” Ian Potter, operations manager, ARLA


Protection


Changes to how insurance companies are taxed could mean several life offices with investment arms raise their premiums to cover increased costs.


“The tax position is only one in a range of factors affecting price, we will have to wait and see how it plays out across the market.” Roger Edwards, product director, Bright Grey


ISMI


Income Support for Mortgage Interest will be extended by one year to January 2013 to help stop 100,000 families from falling into arrears on their mortgages.


The scheme allows unemployed


borrowers with mortgages up to £200,000 to claim up to 100% of their mortgage interest payments after 13 weeks without a job.


REITS


Real Estate Investment Trusts will be simplified to remove barriers to entry and barriers to investment. This includes removing the 2% charge paid by property companies for conversion to Reit status.


Planning Planning regulations will be streamlined and a 12-month cap on applications will be introduced to get rid of what Osborne called a “chronic obstacle” to development. While green belt land will be


protected, the changes could see sustainable projects given automatic approval and councils encouraged to auction land with pre-approved permission for development. Other measures include scrapping the need for permission to convert empty commercial property into housing.


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