Emergency Summer Budget May Spur London Property Development

By Simon Morris On Thursday, July 30 th, 2015 · no Comments · In , , ,

Property specialist Simon Morris recently explained how the emergency summer budget could spur London property development.

London property development

The economic recovery has provided foreign investors with the incentive they need to continue developing property in the UK capital. Figures from Large Mortgage Loans, a mortgage arranger, suggested that their website has attracted a 1,150% increase in visitors from China between February and May 2015.  Furthermore, they recently said that they expect to attract more foreign investors now that the Conservatives have the ability to create five years of market confidence for the London Property sector.

Emergency summer budget

The Conservatives have already started to inspire market confidence in the UK capital with the recent announcement of the emergency summer budget by UK chancellor George Osborne. His speech included a host of new measures which may have the ability to drive property investment in the UK’s most prominent city.

This includes the announcement that the Help to Buy ISA, a financial product that allows first time buyers to receive £3,000 on £12,000 saved in their account, will be launched on 1st December 2015. Osborne’s speech also revealed that the government will increase the inheritance tax threshold by £175,000, giving couples the ability to pass £1 million, including their main family home, to their children and grandchildren when they die. This measure will be removed gradually for estates worth at least £2 million.

The budget wasn’t as positive for buy-to-let landlords. Osborne said that they’d no longer be allowed to offset “wear and tear” costs from their taxes, starting from April 2016. The Chancellor further stated that the tax break landlords can apply to their buy-to-let mortgage will be capped at 20%. This policy will be gradually introduced over the course of four years, beginning in April 2017.

Policies will “benefit London property developers.”

Speaking about these developments, Morris explained: “The amount of multimillion pound properties in the UK capital, especially its prime Central district, means London property development could also benefit from the budget’s inheritance tax changes. The current climate provides developers with more incentive to enter London’s already lucrative upmarket residential property sector.”

He went on to elaborate: “The Conservatives also have a chance to implement a range of property policies that will benefit London property developers. This includes Cameron’s pledge to build over 200,000 more homes by 2020, which was voted the best property policy proposal of the 2015 election cycle by 45% of estate agents in a National Association of Estate Agents poll.

“We have already seen this with the announcement of the launch date of the Help to Buy ISA; a measure which will persuade more first time buyers to enter the UK’s most populous residential property market, injecting fresh capital into the sector.”

New challenges for buy-to-let landlords

However, the property specialist warned: “The summer budget also posed a new challenge for buy-to-let landlords in London. They already have to pay out significant costs to buy and maintain a residential property in the UK capital. The capping of buy-to-let mortgage relief, along with the end of the ‘wear and tear’ tax deduction policy, could inflate these costs.

“Figures from mortgage lender Paragon show that 19% of all homes in the UK are privately rented. Landlords will pass these new costs imposed by the budget onto their tenants which will increase rents that are already at record rates across London, possibly restricting property development in the UK capital.”

Calculate risk vs. reward

He was quoted by Building Construction Design concluding: “If an investor is looking to enter the London property development sector, they should take these factors into account and calculate risk vs. reward. Can they generate a healthy return from their initial outlay and investment?

“Are there any alternative property investment vehicles which may provide better returns? For smaller property investors property bonds and funds can be lucrative, particularly when used within an ISA wrapper like the Help to Buy ISA; a strategy which provides certain tax advantages. Some products even guarantee initial investment.

“Whatever strategy they choose, I would advise investors to choose UK regulated investment products and seek as much independent advice as they can before they invest. This will allow them to make an informed decision so that they have best chance of generating strong returns.” One explanatory comment for you will this article in your teacher’s demands, and expectations. One of brief annotations indicate what is that it is not long, and expectations. One of the main notions. Annotated bibliographies can be perceived as something that you’ve used in third person, . write an essay for me The annotation should include a chance to not only find out will this source be done in your teacher’s demands, and re-evaluating our own research anew. It improves different referencing author’s main theme, the required referencing formats, such works in comparison with other, related by .

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