Major reforms have been announced this week, including over 5.4billion of financial help, to tackle long term problems in the housing market and to support those who want to get on or move up the housing ladder, including the introduction of a new housing scheme; Help to Buy.
From April 2013, the government will extend First Buy to provide an equity loan worth up to 20% of the value of a new build home, repayable once the home is sold, and widen the eligibility criteria, including increasing the maximum home value to Â£600,000 and removing the income cap constraint.
The government will also create a mortgage guarantee for lenders who offer mortgages to people with a deposit between 5% and 20% on homes with a value of up to Â£600,000, increasing the availability of mortgages on new or existing properties for those with small deposits.
Given that the average house price in The Royal Borough of Kensington & Chelsea now stands at nearly Â£1.5 million this is not directly applicable to the property market of central London but we feel that this impetus will improve general confidence and help out many first time buyers in what is a very difficult time to get on the ladder.
Generally the budget announced no bad news for the property market. Corporation Tax is to reduce the rate to 21 per cent next year and drop it to 20 per cent by 2015. This will be the lowest Corporation Tax rate of any major economy in the world and will make London an even more attractive place in which to do business. Given a choice of world cities in which to start up a business, London is now ahead of New York and any major city in Europe. Overseas investors will continue to be attracted to London Property and this can be only good news for the market.