Every year, property market experts say that the housing bubble is going to stop inflating. But those house prices continue to keep steadily rising, don’t they? However, perhaps 2017 is the year that the prediction comes true.
At the moment, house prices are rising a lot faster than the average wage, meaning a lot of people still can’t get onto the property ladder. With Theresa May looking to try and house the ever growing population, 2017 is likely to be a big year for development plans. Chancellor Phillip Hammond is at the forefront of making homes affordable to first time buyers with plans to build on brownfield plots and cut the new builds value by 20% to give first-time buyers the leg up they really need.
So, is 2017 the year for first-time buyers? It’s looking that way at the moment. With government Help to Buy schemes, banks offering 0% deposit mortgages and the opportunities that of Buy to Rent pose, it’s positive news for the 24-40 year olds out there who haven’t made it into their first home yet. Moreover, the government are trying to stop Landlords snapping up all of the cheaper housing by increasing taxes on buy-to-let homes, as well as Stamp Duty on second homes. This change comes as research has shown that the number of 25-year-olds who own their own home has more than halved in the last 20 years. So instead of trying to increase the average salary, the government’s answer is to try and lower house prices in the property market.
If you’re a city lover, then 2017 is the year to buy in London according to experts. There’s going to be a slow-down for the first time for many years, however, the average house price in the capital is still £474,000, over double the typical price in the UK as a whole. The slowdown in central London is the result of the change made in 2016 with the stamp duty surcharge on buy-to-let and second homes. There still are stamp duty bands, but rather that 0% on a home worth up to £125,000, if it’s for a buy-to-let or a second home the stamp duty will be 3%. This increase goes up through the bands remaining 3% above the standard rate across house prices.
Continuing along the theme of the increasing stamp duty means that the luxury property sector might take a plunge as we go into 2017. The stamp duty on homes costing over £1.5 million is 15% rather than 12% so that’s £225,000 instead of £180,000 in just tax – something that could put people off buying a second home in one of the exciting new apartment developments costing over £4,720 per square foot. However, with flats and apartments costing anything from £5 million to an outrageous £23 million and beyond, it’s difficult to imagine that 3% of tax will affect those who want to more to their portfolio. So far, 2017 is leaving property experts in a state of trepidation; will punters risk their cash on a potentially falling housing market? Or, will the UK property market continue on the path it’s been on for some time? Only time will tell.
Is equity release a good idea for 2022?
Equity release can be a good idea for older people who would like to gain some extra cash in retirement. Equity release can help you make home improvements, pay for the costs of care, help a loved one who is struggling financially, or pay off other debt. However, the release of equity is not suitable for everyone.