Waterfords comments on the Budget 2015
The budget did not reveal anything ground-breaking in favour or to the detriment of the housing market, which was largely expected following the overhaul of the stamp duty system back in December 2014, as well as being just two months from a General Election.
With that said, the two central piles of good property market foundations are affordability and confidence. Chancellor George Osborne took one further step to strengthen these with the introduction of a Help to Buy ISA, which will act as a 25% top-up on deposits.
The government will add £50 to every £200 that an intending home buyer saves in one of these new ISAs. George Osborne said the new scheme could be used by a first-time buyer needing a 10% deposit of £15,000. Therefore a buyer now only needs to save £12,000 as the Government will top up the amount by £3,000.
The chancellor said, A 25% top-up is equivalent to saving for a deposit from your pre-tax income its effectively a tax cut for first-time buyers.
The scheme will be available on properties worth up to £450,000 in London and up to £250,000 outside the capital. It can also be used by couples buying a home together, potentially doubling the governments contribution to the scheme which should be launched this autumn.
Mr Cox continues, For deposit-strapped first time buyers this is a welcome and timely boost. It should accelerate the speed in which they can get into the market by shortening the period they have to spend in saving for a deposit. This is important at a time when in many areas house price inflation has outpaced wage inflation. However, I do feel that further measures to encourage the top of the market to free up property will have to be addressed in the future as this appears to be one of the underlying issues with stock availability, thus continuing to push prices up.