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The Chancellor should look again at the nation’s Stamp Duty thresholds, an archaic tax structure which is distorting the housing market, says RICS as part of its 2014 Pre-Budget statement.

The existing ‘slab’ Stamp Duty system taxes a percentage of a home’s purchase price according to which value bracket it happens to fall into. For instance, a buyer purchasing a property for under £250,000 would pay one percent of the price in tax, while a home sold for just one pound more would generate a tax bill of three percent. This means that many buyers are financially unable to venture above the threshold and vendors may have to price their home below what they may otherwise have sold it for. RICS believes that the government should consider a fairer, marginal rate to replace the current structure which sees few homes come onto the market at between £250,00 and £275,000 whether or not they are worth that price.

The government should also consider adapting Help to Buy to suit individual regions’ needs. Sixty percent of RICS members surveyed believe that adjusting the scheme on a regional basis would make the market more sustainable. Furthermore, half of those who are in favour believe that the funding should be limited purely to first time buyers. RICS would like to see the government reassess the scheme with a view to providing the relevant help according to an individual region’s needs.

Garden cities could prove a good means of boosting the supply of homes on the market. However, these cities need to be located in places where people are able and willing to live, close to sources of employment and the houses need to be affordable housing. To make the garden cities a reality the government needs to publish its outline prospectus to test the market by giving potential developers, communities and investors clarity and certainty.

While much progress has been made in recent years regarding empty property rates, unoccupied shops and offices that require refurbishment before being re-let are still subject to prohibitive business rate tax. This situation acts as a huge disincentive for landlords to ensure their premises are brought up to quality and environmental standards. RICS would like the government to consider a rate exemption period for these premises which would also result in more work for smaller, local construction firms, while helping the commercial property sector meet its April 2018 target of making buildings more environmentally sustainable.

Jeremy Blackburn, RICS Head of UK Policy, said:

“This is a very important Budget for the Chancellor and one which will shape the economy in the run-up to the general election. A major area of concern in the property sector, at present, is the current Stamp Duty system which is both out-of-date and distorts the market by taxing buyers disproportionately high amounts should they go just one pound over the pre-set thresholds. A more intelligent, modern way of taxing property sales is needed for a market which is changing at a rate of knots.

“We would also like to see George Osborne provide more detail as to exactly what is meant by new garden cities and precisely how they would benefit communities and the economy. Taxing landlords who renovate their empty shops and offices is also on burden on the economy and discourages owners from taking their premises out of circulation to meet environmental standards.”

main copy.qxdHouse prices in the South East will see an increase of seven percent over the course of next year while the cost of renting a home should rise by a further two percent. This growth is being driven by the acute imbalance between burgeoning buyer demand and sluggish supply with new instructions to estate agents close to stagnating.

Although significant challenges remain to achieving a sustainable economic recovery, 2014 may well see the nascent pick-up in activity gather pace and this will be reflected in the housing market. In addition to rising prices, the number of transactions should also see a further increase, moving up to 1.2m (from 1.05m in 2013). Although this represents an improvement, to put this in context, total sales in 2006 were well above this at 1.67m.

With the shortage of homes coming onto the market a key factor behind the price rises, some comfort may be drawn from a likely twenty percent jump in new starts in England over the next year. That would push the total towards the 155,000 mark compared to 125,000 this year and only around 100,000 in 2012. While this is an encouraging trend, it is still insufficient to address the more rapid growth in population and will leave significant shortfalls in all tenures.

Across the UK, all parts of the country should see prices rise next year. Predictably, the biggest increases are to be seen in the capital, where the cost of a home will jump by around eleven percent. It remains to be seen what impact the recently announced increase in capital gains tax for overseas vendors will have on the prime central London market.

Meanwhile, the North East and Northern Ireland will experience the lowest rises with prices increasing by five percent and four percent respectively.

2014 UK housing market at a glance

UK REGION GROWTH

East of England ——————10
East Midlands———————10
London—————————-11
North East————————-5
Northern Ireland——————-4
North West————————-7
Scotland—————————7
South East————————-7
South West————————-7
Wales——————————7
West Midlands———————-7
Yorkshire and Humberside———–7
UK———————————8

• Cost of renting to grow by two percent
• Transactions to increase to 1.2 million
• Housing starts to edge up to 150,000 in England

Peter Bolton King, RICS Global Residential Director, commented:
“The cost of a house is now picking-up right across the country and next year should see more of the same. We expect all areas of the country to see prices increase with London, predictably, recording the biggest rises. The improving economic picture aside, this is largely down to the fact that buyer numbers considerably outweigh the amount of homes on the market. While the number of new homes being built is now on the rise, it still won’t be anywhere near enough to meet demand and we expect the problem of insufficient housing stock to be the main driver behind price increases over the next twelve months.”

Two Hoo Peninsula firms are among the first in Kent to successfully apply for a Tiger loan in Kent – receiving a combined total of nearly £250,000 to help grow their business.

TIGER – Thames Gateway Innovation, Growth and Enterprise – is a regional growth fund offering low-cost loans allowing businesses to invest in new products and services. Read More

Press release from the TUC

TAXNearly one in four council housing tenants affected by the bedroom tax in areas across the South East have fallen behind on their rent since its introduction earlier this year, according to new figures released today (Thursday) by False Economy.

Figures provided by 19 local authorities across the South East in response to Freedom of Information (FOI) requests by False Economy show that since the bedroom tax was introduced this April, more than 2,000 council housing tenants – 23 per cent of all tenants affected by the tax in these areas – have been pushed into arrears. Read More

With autumn upon us once again, it’s time to think about tidying up the garden and preparing the soil for spring. The traditional picture of autumn gardening is of a smoky bonfire to dispose of fallen leaves, prunings and the last grass cuttings of winter. However, a much more environmentally-friendly approach to dispose of your garden waste is to compost at home.
Under an initiative backed by the local government, most local authorities are offering discounted composters in partnership with www.getcomposting.com. Prices start at £16 plus delivery – less than half the recommended retail price of £39. Some local authorities also have subsidy available to reduce prices even further.
To see what’s available in your local area – including special buy one get on half price offers – call 0844 571 4444 or look online at www.getcomposting.com. Simply enter your postcode to find the best deal for you.

Click HERE to go straight to the page to enter your post code

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