The headline announcements in The Autumn Budget 2017 were about housing and stamp duty. This is all in a bid to stimulate the housing market, which has seen a slump in housing transactions in the UK by 35% since the financial crisis, and to help towards the housing crisis and lack of housing supply.
According to The Government’s website;
300,000.00 New Homes to be Built
- £15.3 billion new financial support for house building over the next five years, taking the total to at least £44 billion. This includes £1.2 billion for the government to buy land to build more homes and £2.7 billion for infrastructure that will support housing.
- The government will also create 5 new ‘garden’ towns.
Abolishing Stamp Duty Land Tax (SDLT) on Homes Under £300,000 for First-time Buyers From 22 November
- 95% of first-time buyers who pay stamp duty will benefit.
- First-time buyers of homes worth between £300,000 and £500,000 will not pay stamp duty on the first £300,000. They will pay the normal rates of stamp duty on the price above that. This will save £1,660 on the average first-time buyer property.
- 80% of people buying their first home will pay no stamp duty.
- There will be no relief for those buying properties over £500,000.
But what impact will this have on Wales?
The new 300,000 homes are to be built across England, such as Milton Keynes, Bedford and Cambridge, so the new homes will have little impact on the market in Wales.
According to the UK House Price Index, the average house price in Wales in July 2017 was £150,846.00. You are currently not liable to pay stamp duty on the first £125,000.00 of a property’s purchase price. Therefore, the liability on the average house purchase in Wales would be £516.00. Following the announcement, first time buyers will no longer be liable to pay this.
Further to the UK House Price Index report, Wales’s house prices are one of the fastest growing in the UK, especially in the south with the annual price change of a property in Wales rising by 3.1% from July 2016 to July 2017. In Cardiff this annual increase was higher; 4.3%. Bridgend had the highest annual house price rise of 12.1%!
However, these changes are to be of little effect in Wales as in April 2018 Wales’s devolved Land Transaction Tax is being introduced, which means that no-one pays stamp duty on a property worth up to £150,000 but they will have significantly higher rates for properties worth over £400,000.00.
Welsh Budget 2018/19 – changes to stamp duty
Given the recent changes, the Welsh Government may come under pressure to fall in line with what is being offered in England.