The Autumn Statement for 2014 included some surprising changes in the property market. One of the major changes is the way stamp duty, the tax paid to the government, is calculated when properties are bought. The old system was centuries old and saw buyers pay a percentage based on the total value of the property. This outdated slab system has been replaced by a progressive income tax style system instead, meaning 98% of people looking to purchase houses could be looking at savings.
The changes are benefiting people buying properties valued at below £937,000 by delivering savings worth thousands of pounds. This is expected to stimulate the market and help first time buyers to purchase homes. It also had an unexpected affect by encouraging buyers looking at properties valued at over Â£1 million to rush through purchases and get savings with the old system before the new rules came into practice. The new stamp duty rules are being well received because it brings a new, progressive structure that gets rid of the problems with the previous one.
Investors have had to change their strategies a little to account for the new rules, particularly those targeting London. This has meant more people are looking at lower value investment properties in development belts rather than expensive homes in prime locations. The savings mean money can go further by purchasing properties valued below the Â£937,000 mark, encouraging people to look further afield. Locations close to new transport links are the most highly demanded because they have such potential for the future.
Estate agents and property investment specialists in London are facing more work as they explain the new rules to buyers and help them to find the right opportunities for their money. It is an interesting time and the market could be set to respond, setting everything up for an interesting new year. It is expected that the number of first time buyers and people climbing up the property market will rise, bringing new movement to the market and helping to solve some housing issues.
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