HIP's are a dark and distant memory, those wishing to tentatively dip their toes into the property market now, without losing £400 for the privilege, may just do so. We are already seeing more homes come onto the market.
The caution comes in the form of the £167 billion budget deficit. The new coalition government has a lot to contend with. The annual rate of house-price inflation may be 9.8 per cent, according to Nationwide, but this is not distracting attention from the economy.
The market will be kept ticking by the 75 per cent of homeowners who have no mortgage or only a tiny loan. Of course there are people with little or no housing debt to be found everywhere in the UK, but they do not all have the same amount of leeway. Those who happen to reside in the wealthier areas where prices are only 3.2 percent from the housing peak of 2007 will be more likely to move.
Unfortunately the same cannot be said of areas crippled by unemployment, where prices are stagnant at 19 percent below their 2007 level. This gives us a tilted recovery.
June 22 bring us the emergency budget, the Chancellor, will inform us of his debt busting plans. Within this budget he will confirm the new top rate of capital gains tax at 40%. Already Buy-to-let investors are starting to get very worried, but have not started to panic sell as yet.
The Chancellor may also set out plans for the tax breaks on holiday homes, of the type that are let out. The withdrawal of these reliefs was postponed for the election. Mr Osborne is now under pressure to retain these concessions for those who rent out their properties for a minimum of 20 weeks a year (rather than 10, as at present). One justification would be the jobs that depend on holiday lettings, such as cleaners and gardeners. Small in number, maybe, but the entrepreneurial spirit that the coalition Government wants to foster is all about starting small.
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