#Budget2013 : Help to buy – impact on UK property market

Will the “Help to Buy” scheme help home buyers?

Budget 2013 Help to BuyThe Chancellor, George Osbourne has announced the budget for 2013 and beyond. Overall the budget covers all aspects or work and life in the UK, however we are concerned with property.

The head line for property has been the “Help to Buy” scheme.

There are 2 options, one for new buyers and new homes only and one for all property and buyers.

The below options breakdown are provided by Zoopla blog on the budget

Option 1: Help to buy – Equity Loan

-Is it applicable to any property?
No, just new build only

-Deposit required?
Yes, minimum of 5% deposit

-Do I have to be a first time buyer?
No, this scheme is available to all, not just first time buyers

-How does it work?
The Government will lend you up to 20% of the value of your property through an equity loan, which can be repaid at any time or on the sale of your home…so you will only need to secure up to a 75% mortgage from a bank or building society. It is interest-free for 5 years

-When does it start?
The scheme is available from 1 April 2013. It will run for 3 years and provide £3.5billion of additional investment

Option 2 – Help to buy – Mortgage Guarantee

-Is it applicable to any property?
New build and existing homes

-Will I need a deposit?
Yes, you’ll need a minimum of 5%

-Is it only open to First Time Buyers?
No, it is also open to existing homeowners

-How does it work?
You’ll need to secure a mortgage for your purchase. The Government guarantee should help encourage lenders to offer better access to low-deposit mortgages

-When does it start?
Available from January 2014, this scheme will run for 3 years

-Is there a maximum purchase price?
Maximum value £600,000

 Other points from the Budget 2013:

  • Budget 2013 help to buy21 % corporate tax rate – potentially beneficial to buy rental properties into a company rather than private names
  • Encourage to convert unused commercial space into residential

London Mayor, Boris Johnson has also secured £750 million for new build housing in the capital. This will boost affordable housing for middle income Londoners.

Official details can be found here: HM Treasury – pages 38 & 71

PropVestment’s thoughts

Overall we believe that the budget is progressive for the UK Property market, however it could have done more. However it seems that Help to Buy is more universal and will help more of the population. It is now for us to see how it filters through in reality. Many other schemes like NewBuy and FirstBuy have been less successful

 

Contact PropVestment today for a chat, we advise on all property investment queries. Lets make money from property

 

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