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Housing strategy, landlords tax grabbed, UK house prices, property valuations, and demand for holiday homes

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UK property news has headlined new moves in the government’s housing strategy, while the price of a home in this country has risen for the eleventh month in a row. We also note some advice on what to do if your property achieves a lower valuation than you’d expected.

Meanwhile, the taxman seems to be doing very nicely on receipts from landlords and the demand for second and holiday homes has now outstripped pre-pandemic levels.

Boris Johnson launches scheme for those struggling to enter the housing market

An article by Wigwam Property News describes a twin-pronged element of the government’s latest housing strategy designed to help “generation rent” get onto the housing ladder through buying their first home.

The move sees the so-called Right to Buy scheme extended from local authority homes also to those owned by housing associations. Discounts of up to 70% are likely to be available to those eligible to buy the home in which they are living – depending on how long they have been tenants there.

The second element of the government’s initiative relies on freeing up access to low-interest mortgages so that even those on Universal Credit can use their housing benefits to save for the reduced amount of deposit needed.

Housing representatives have given a cautious welcome to the initiatives while stressing that the supply of affordable, social housing also needs to be maintained.

Tax Grab! Massive premiums paid by landlords to HMRC

Since the additional 3% Stamp Duty surcharge was introduced in 2016 for the purchase of second homes (including buy to let properties), the tax-take by HM Revenue & Customs (HMRC) has increased considerably, according to a story in Landlord Today on the 10th of June.

Immediately before the imposition of the surcharge, the average amount of Stamp Duty paid on the purchase of a buy to let property was £1,953. In the month following the introduction of the surcharge, that average shot up to £8,689 – an extra windfall for HMRC of 345% in revenue.

At today’s prices, the average amount of Stamp Duty paid on the purchase of a buy to let property is £13,801 – which amounts to an increase of 607% since the introduction of the surcharge in 2016.

The result is that landlords who invest in a buy to let property are paying an average of £13,801 which is 183% more than the £4,876 paid by a regular owner-occupier.

UK House Prices – Latest News

In an article on the 9th of June, Forbes Advisor revealed that the price of a home in the UK had risen by a further 1% in May – the eleventh consecutive monthly increase.

With the latest increase reflected in the overall statistics, average house prices have now jumped by 74% in the past ten years – to a new record of £289,099.

These movements in house prices have taken place against the background of an annual rate of inflation currently running at 10.5%.

Expert reveals what to do if your property is valued at less than expected

It is likely to come as a nasty surprise if a property you own or want to buy is “down-valued” – valued at less than either a seller or buyer had reasonably expected. Property Wire on the 10th of June suggested ways in which you might react:

  • if you are a buyer, negotiate a new price with the seller – so that it more accurately reflects the valuation determined by your mortgage lender;
  • choose a different lender – since valuations used by different lenders may vary considerably;
  • vary the loan to value ratio of the mortgage you are requesting by offering a bigger deposit; or
  • challenge the valuation – bearing in mind that not all lenders will be prepared to entertain any such challenge.

Demand for holiday homes from British buyers booms above pre-Covid levels

Freedom from the travel restrictions of Covid has been followed by a surge in interest in the purchase of holiday homes abroad said a story in the Mail Online on the 9th of June.

Enquiries about the purchase of a holiday home anywhere abroad have increased by 18% compared with the same time last year – and the destination proving more popular than any other is Spain.

Enquiries about buying a holiday home in Spain were 36% higher this April than they were in the same month last year, noted the newspaper, quoting figures compiled by online listings website Rightmove.

British buyers purchased more holiday homes in Spain than since 2018 and purchases are already up by 16% on the year immediately preceding the outbreak of the Covid pandemic. Buyers from Britain represent the largest single group of overseas investors in Spanish holiday homes – seizing an estimated 16% of all foreign purchases.