How will the 2015 Budget affect the property market?

By Andy Noton

The Chancellor recently announced a number of initiatives that could have a significant impact on house prices. Here’s my take on a couple of the most significant.

First-time buyers

In a move aimed at helping first-time buyers, the Chancellor has announced a Help to Buy ISA. While this is aimed at those just starting out on the property ladder, the new scheme will top up every £200 saved with £50 from the government, to the sum of £3,000 per annum. Over the course of the ISA, available by the autumn, savers who invest the maximum amount of £12,000, will receive a top up of £3,000. This takes savers to the average UK deposit of £15,000. It has been described as a tax cut for first-time buyers.

The ISAs are limited to one per person (not per home), which means couples can reap double the benefit. London property prices have already been taken into account and the bonus is available on purchases of up to £450,000 (up to £250,000 outside London).

Additional housing stock

The launch of 20 new housing zones, with a focus on the under provided South East of England, will help to alleviate the property shortage. While it will provide additional homes for buyers, this could potentially affect spiking house prices in certain areas of the country.

Property investors will already be evaluating Plymouth and Blackpool, two areas which have been nominated as enterprise zones. Additional investment and focus will not only boost the local economy, but stimulate the housing market.

Within London, a £97m pot of funding has been set aside to support the London Borough of Barnet and its plans to regenerate Brent Cross. This will include 7,500 new homes and 4.9 million square feet of commercial development.

The stalled garden city development at Ebbsfleet was also given some attention by the Chancellor, who wants the Urban Development Corporation set up last year to give the project some momentum.

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