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Budget 2016: Help for first-time buyers and clarity for landlords

16.03.2016

Today’s Budget has thankfully delivered few shocks for the property sector but there were a few announcements that will affect first-time buyers and landlords.

Lifetime ISA

Those under 40 will be able to use a new Lifetime individual savings account (ISA) to save up for a home or pension. To be launched in April 2017, savers will be able to put in up to £4,000 a year, with an annual bonus of £1,000 coming from the government. Help to Buy ISAs can be rolled into the Lifetime ISA.

The Lifetime ISA is welcome as it should encourage saving but if property prices keep rising at the same rate as they have been, it is still going to be incredibly difficult for first-time buyers to get onto the housing ladder.

There is a £450,000 limit on any property purchase which will exclude many homes in London and the south-east, and unless this limit rises on a fairly reasonable basis, it will be of limited use to those buying in more expensive areas. The problem of supply remains an issue and unless more homes become available, property prices won’t be kept in check.

3 per cent stamp duty surcharge

The Chancellor also announced that the 3 per cent stamp duty surcharge on purchases of additional properties from April will apply to larger investors as well as accidental landlords. It was thought that larger landlords would be exempt but they, as well as those buying property via a limited company, will have to pay the extra tax.

Even so, buying property through a limited company is likely to become the sensible way forward for those investors wanting to continue to benefit from mortgage interest tax relief. But lenders must catch up with the changing face of buy-to-let as most offer few options on the mortgage front for those buying via a company. This will have to change – and quickly – if lenders wish to grow their buy-to-let lending book.

There was some good news for those who have an overlap between two properties – perhaps they haven’t been able to sell one before buying another. The grace period has been extended from 18 to 36 months, during which owners can claim a refund on the higher stamp duty rates. This will give owners more time to sell up, reducing the pressure on them.

Jonathan Harris
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Jonathan Harris

Anderson Harris Commercial launches

08.03.2016

Mayfair-based mortgage brokerage Anderson Harris is delighted to announce the launch of Anderson Harris Commercial.

The business, headed up by commercial funding specialist Adrian Dadds, will help clients secure development funding for speculative residential schemes, including flats as well as houses. Anderson Harris Commercial will also arrange funding for clients looking to purchase a business premises, including office blocks, shops, restaurants, pubs and professional practices.

Jonathan Harris, director of Anderson Harris, says: ‘The growing emphasis on building new homes to solve the UK housing problem means development funding is in great demand. However, this is an extremely niche area, requiring specialist advice. We felt it was the right time to launch a commercial proposition, which can concentrate on this growing part of the market.

‘With buy-to-let under attack, nervous investors are understandably looking to diversify their approach, and many are turning to commercial property.’

Adrian Dadds, director of Anderson Harris Commercial, says: ‘Historically, there has been far less demand for commercial investment compared with residential, with the bulk of investors preferring to opt for the latter. But investors are increasingly turning to commercial investment because it can produce decent returns while being very low maintenance. If there is a commercial unit let on a decent term on a fully repairing and insuring lease, for example, there is little for the investor to do between rent reviews so no need to worry about fixing a boiler or funding a new tenant every six months.’

Jonathan Harris
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Jonathan Harris