Autumn Statement – what it means for the Construction & Real Estate sector
Posted On November 25, 2015 By mhauk
Robert Dowling, Head of our Construction & Real Estate sector, shares his views on today’s Autumn Statement:
“The Chancellor announced that there will be 400,000 new subsidised homes by the end of 2020. £4bn will be made available over the next four years to be offered as grants for shared ownership properties, which will help workers get onto the property ladder. However, acquiring a part-stake in an average property will still require a deposit to be put down which will continue to make a new home unaffordable for some people.
The Chancellor also stated that £2.3bn would be available to directly fund new starter homes, which will be offered at a 25% discount to first-time buyers under the age of 40. Private developers who build the subsidised homes are expected to benefit, however, even with the discount, the new homes remain unaffordable for those on average wages.
A further announcement from the Chancellor related to raising the Stamp Duty Land Tax for landlords and second-home owners; from April 2016 investors will have to pay a 3% Stamp Duty surcharge. The impact of this measure will be that Stamp Duty will, for example, increase from £1,500 to £7,500 on a £200,000 house. This is a further measure that follows on from the Spring Budget which is intended to prevent restricted housing stock being consolidated into the hands of landlords and second-home owners.
Finally, the Chancellor pledged £73bn for road and rail projects over the next six years to April 2021. Although this will result in an increase in the capital spend available on projects, there will be a reduction in the cash available for day-to-day spending. However, it will mean that the construction of HS2 linking the North and the South can begin and the £5bn announced for roads maintenance is welcome news”.
If you would like to discuss any of these issues in more detail or you would like to speak with a member of our team, please contact Hannah Farmborough or call on 0207 429 4147 to be put in contact with your local representative.