As our chancellor Phillip Hammond closed his Autumn Statement at parliament earlier this afternoon we, and the rest of the property industry, begin to ask the questions, how will this affect us and more importantly, our clients?
Firstly, housing was a hot topic expected to be on the agenda before the statement began, the chancellor announced the following regarding our industry:
NO STAMP DUTY for first time buyers up to the value of £300,000.
Stamp duty reform has been a talking point within the industry for a while, the chancellor was proud to announce the suspension of stamp duty for first time buyers up to the value of £300,000 effective immediately, and in London, no stamp duty on the first £300,000 to account for the increase in property value.
So what does that mean for the Portsmouth market?
The average property purchase price in Portsmouth between January to September 2017 was £200,036 (Land Registry, 2017). This translates to a saving of close to £1500 for our cities first time buyers. An amount gladly saved after already struggling to save for the all-important deposit.
Stamp duty for second properties remains the same with the additional rate of 3% to be added. Using the average purchase price of £200,036 again, this would translate to a stamp duty bill of close to £7500 for the exact same property.
Longer tenancies in the private rental sector.
The government has announced a consultation into proposing longer tenancies in the private rental sector. As it stands the longest Assured Shorthold Tenancy (AST) is 2 years. However, in our experience most tenants and landlords prefer 6 or 12 month contracts, as this allows for flexibility for both parties. Although extending the maximum length of an AST may seem attractive from potential tenants perspective, this locks them into a fixed term contract. Ultimately delaying them eventually getting on the property ladder themselves and taking advantage of opportunities which may require them moving from the area.
Give local authorities the power to charge 100% council tax premium on vacant properties
Gone are the days of the discount for vacant properties. This has always been under the control of the local authority; however, Portsmouth City Council removed the discount for vacant properties several years ago. Meaning this new announcement will not have much bearing on the city or our landlords.
Naturally the chancellors overall budget covered a number of aspects within the UK economy and here we are focusing on the elements effecting housing within our city. From our perspective as your local independent estate agent, we feel the property market in Portsmouth will see little change. Although investors may begin to consider other viable investments and potentially begin to sell some of their existing portfolio, these properties will now be available to more first time buyers than before. The transition from tenant to homeowner will logically increase the available stock within the rental market, nevertheless, as a city we have always been fortunate that there has and is a high demand for property, we do not foresee this changing in the short term and welcome the increase in activity within the market.
If you are considering renting or selling your property now or in the near future feel free to give us a call or pop into the office, alternatively find out your properties potential rental or sale value with our free instant online valuation tool.