What the Budget 2017 means for the London property market

Now the dust has settled on the Budget 2017 and with time to reflect on its contents, Central London estate agents Kay & Co can report on what it means for the property market.

philip hammond budget london

Those who were hoping the Chancellor might reverse some of the Government’s recent decisions concerning the home moving and property investment market were unfortunately, left disappointed.

Mr Hammond’s first Budget contained hardly a glancing mention of bricks and mortar and the news was more about what was left out rather than what was included. The key points for the property sector included:-

1. No reverse of the mortgage interest tax relief change for landlords, with the phased downgrading poised to take effect from April 2017.
2. A change to the tax-free dividend allowance for company directors, with the amount slashed from £5,000 to £2,000 from April 2018. This will deter many landlords from setting up companies to avoid the aforementioned tax change.
3. No reverse of the 3% stamp duty surcharge for second homes.
4. No revision of the stamp duty thresholds for primary property purchases.

Martin Bikhit, Kay & Co’s Managing Director, comments "Thankfully there were no shocking announcements in the Spring Budget. While we welcome the Government’s commitment to help young people gain the skills they need to power our construction and Engineering industries – which will boost the supply of properties for sale in Central London – we do think there were missed opportunities to improve the fluidity of the capital’s housing market. Landlords continue to be hit hard at a time when the demand for properties to rent in Central London is rising and Build to Rent units are slow at coming to fruition. With no backtrack on the scrapping of tenant fees and now a rise in National Insurance payments for the self employed, property investors may start feeling the pinch. To restore some equilibrium, Kay & Co is urging landlords to re-mortgage for lower rates, which should result in reduced monthly repayments.”

"For Central London property sales, it would have been good to see a reduction in stamp duty - especially for homes at the more premium end of the market. The stamp duty changes introduced by the previous Chancellor, Mr Osborne, have been keenly felt in London and are being blamed for a somewhat sluggish period in the capital. Sadly the 3% stamp duty surcharge for second homes remains, and affects both property investors and those buying a second home as a base in London. But the property market in the city is resilient. Kay & Co handles the sale and let of some of the most desirable properties in Central London, and these prove popular whatever the political and economic backdrop. While Government milestones make front page news, they do little to deter our phones from ringing.”

If you are looking for houses or flats for sale in Central London – in areas such as Marylebone, Bayswater, Paddington, Hyde Park, Fitzrovia or Regents Park - please browse the Kay & Co website or contact us today.

Image Souce: telegraph.co.uk

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