Monday, April 25, 2016

What will happen to the property market in 2016?

The property market will have rather more on its plate in 2016 than the perennial issue of whether house prices will go up or down.


The recent decision of the US central bank, the Federal Reserve, to raise interest rates for the first time since the summer of 2006, has opened the door for the Bank of England finally to follow suit.

And one thing that will certainly happen in England and Wales is that from next April, stamp duty rates will be jacked up for anyone buying a home that is not their main residence.

A similar change will happen in Scotland.

That will make things more expensive for second-home buyers and buy-to-let landlords, and deter some potential buyers altogether.

So, after a few years in which the the mortgage tap has been turned back on and sales have revived, the property market is in line to receive some jolts.

Hard times for landlords Landlord's mug.


Who would have guessed that a Conservative government would take a dim view of buy-to-let landlords, just the sort of people supposed to be staunch Tory voters?

But that is exactly what has happened.

Not only will their stamp duty rates rise, but an erosion of some of their tax privileges is now in the pipeline for 2017, after an announcement in the Chancellor's summer Budget.

Also, the Bank of England wants the power to limit overall lending to buy-to-let borrowers, something to which the Chancellor will almost certainly agree.

The economic and political problem, as the government sees it, is that the rise of private landlordism has crowded out home owners, especially the fabled first-time buyers.

"The government is very motivated to reverse the trend in owner-occupation - this is now a very important part of the government's housing strategy," says Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors (Rics).

"Buy-to-let landlords have had a very good run - holding property has been a very lucrative investment, so if the government has to squeeze the buy-to-let landlord it will take that in its stride." 'Frightening prospect'

Read more http://www.bbc.com/news/business-35135639

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