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UK turns the screws on landlords, doubles down on help to buy
[LONDON] The UK government gave its clearest signal yet that first-time buyers are its housing priority while landlords remain in the cross-hairs.
Contrary to fevered speculation that the generous Help to Buy policy might meet its demise -- originally sparked by a review into the program -- the government will actually extend its interest-free loans to 2023, with some tweaks that focus the policy more specifically on debut home buyers.
UK Review of ‘Help-to-Buy' Shows Program Helped Boost Housing
Rental investors, meanwhile, were hit with the removal of lettings relief, a break that reduces capital-gains tax for homes that have at some point been rented out. Only properties where the owner remains in occupancy and rents out a room will be exempt.
The measures reflect the Conservative government's determination to increase home ownership for younger voters, a goal that has been out of reach in part because of price inflation caused by wealthy pensioners investing in rental property. While home builder shares might rise on the extension of Help to Buy, which was revealed in the Budget documents after markets closed, the government's moves were muted compared with the sweeping changes they've introduced in recent years.
Other key measures included:
A package of policies designed to support town and city-center stores, including the potential relaxation of rules to make it easier to convert vacant units into homes
More funding for housing infrastructure and bank guarantees to support small builders
Scrapping stamp duty for shared ownership homes worth up to 500,000 pounds ($$885,000)
Cutting property taxes for some businesses with lower-value stores
The government will publish a consultation in January on a stamp duty surcharge of 1 percent for non-residents buying homes in England and Northern Ireland
Alongside the main budget document, the government also published the independent review of Help to Buy, which concluded the program has supported the development of more homes. It also published a review into so-called land banking that found large house builders were not guilty of hoarding plots and slowing development in order to boost prices.