So with the popular property buying season in front of us, I regularly get asked what do you think will happen to the market and for once 2016 maybe will be dictated to in part by a couple of changes made by the government towards the end of 2015.
The government seem to be making an obvious push to do everything possible to enable first time buyers to get on the housing ladder with the launch of an interesting initiative that has not been seen before; the help to buy ISA. This is the option for a tax-free payment from the government of up to £6,000 for couples buying their first home, and interest rates of up to 4% when saving for a deposit.
Like normal cash ISA’s, the help to buy version will offer a place to put money and earn interest free of tax. When an account is first opened savers will be able to deposit up to £1,000 as a lump sum, then up to £200 a month (not necessarily in a single payment) until the account holds a maximum of £12,000. When the saver comes to buy a home the government will pay a bonus of 25% – which means up to £3,000 is available per head.
I believe this will see more first time buyers focusing on saving the deposit required when buying their first home.
The government is also trying to stem the flow of the typical first time buyer type of property being sold to buy to let investors. Property investors will be hit by a 3% rise in stamp duty from 1 April 2016, and the surcharge will also apply to people buying second homes. This means the tax bill on a buy-to-let property costing £250,000 will jump from £2,500 to £8,800.
We have already seen an increase in buyers trying to secure their investment purchase that they may have made in the latter part of the year before the April deadline.
At Lang Town & Country we feel 2016 will be another positive progressive year in the Plymouth property market and selecting the right experience agent to sell such an important asset is the key.
