Britain faces massive housing problems. The burgeoning population growth quickens with the influx of migrants from other EU countries.

 

The Chancellor in his Autumn statement 4th December 2014, makes changes to stamp duty charges, with the residential slab system abolished altogether. In future each rate will only apply to the part of the property price that falls within that band – like income tax.

 

Here are the new marginal rates.

Homebuyers will pay no tax on the first £125,000 purchase price

Then 2% on the portion up to £250,000.

Then 5% up to £925,000.

Then 10% up to £1.5 million.

Then 12% on everything over that.

The purchase of a £20m mansion in London will now attract stamp duty of £2,291,175.00. Will London property prices decline sharply under this tax pressure.

 

UK home buyers struggle to afford to buy, priced out of their own market, but wealthy foreign investors from distant lands snap up UK property.

Previously George Osborne stepped in to help the beleaguered housing market by offering a new Government underwritten Guarantee Equity Loan Scheme to help new and existing homeowners. Providing purchasers can raise a deposit of 5% of the value of the property they want to buy, they can then borrow up to a further 20% from the Government on an interest-free basis, which then leaves 75% to be financed by a traditional mortgage.

 

The Government is also running a £12billion mortgage guarantee scheme designed to encourage mortgage lenders to offer up to £130billion-worth of high loan-to-value mortgages. It will be providing guarantees of up to 15 per cent on homes worth less than £600,000. It is set to be introduced in January 2014. This initiative will create added stimulus to the housing market and revive buyer interest, so get those properties advertised on Homes On The Net

 

The latest immigration statistics released in 2015 indicate a net migration to the UK hitting a new record of 330,000 in just one year. Equivalent in population to a City the size of Nottingham or put it another way 827 immigrants checking-in to Hotel UK every 24 hours.

 

The UK is quickly creating increased and massive housing problems. With a burgeoning population and an influx of migrants arriving every day from other EU countries inevitably pushes up house and accommodation prices. Wealthy foreign investors are also pumping up house prices by buying multiple numbers of prestigious homes, especially in London. We are told that London is now 40% owned by foreign investors. With the threat of a Mansion Tax now lifted it is anticipated that a renewed surge of wealthy foreign property buyers will be snapping up quality London property. UK property is an excellent investment, but the average cost of property now forces many UK home buyers completely out of their own market and according to a recent Nationwide Building Society report the value of property has risen significantly year on year, taking the average price for a UK home to £196,514, but the average price of a property in the London is £462,799

 

So the typical UK home is now worth £196,514 with property prices stabilising or increasing, but currently around 827,000 households in the UK are estimated to be in negative equity. In most areas new mortgage approvals down by 60% over the last two years, but at least major mortgage providers are agreeing to wait three months after falling into arrears before initiating repossession proceeding.

 

Property repossessions are running at approximately 900 per week with estimated arrears cases totalling 200,000. Sources indicate house sales at a 30 year low. Families in some areas who have their homes repossessed can face a six-year wait for social housing. Home repossessions at 12-year high.. Bank of England also suggest that up to 1.2 million home owners face negative equity.

 

Sellers and Buyers Beware!

Recovery in the property market could become suffocated as new lending proposals are implemented. Even more so if interest rates start to increase. Home ownership for a large portion of the population will be nothing more than a pipe dream, but a surge in property buying is expected due to pent-up demand.

 

Greater emphasis will now be given to the following:

 

1/ Detailed income checks for all mortgage borrowers

2/ An end to fast-track mortgages where loans are approved without detailed checks.

3/ Tougher affordability tests to ensure borrowers can cope with rises in rates

 

The European Commission also want to chip in with their pennyworth by introducing new regulation which would give prospective borrowers a compulsory 10-day ‘cooling off' period for ‘reflection' when applying for a mortgage and it also aims to standardise European mortgage markets

 

Research has indicated the Buy To Let market is booming.

 

FACT:

Empty Homes Statistics 2013 - How Many Homes Are Empty?

635,127 empty homes are currently empty in England according to the 2013 Empty Homes Statistics

In Europe prices for most types of property have fallen substantially during the last 12 months and in some instances by as much as 75% and in the Andalucia region of Spain for example there are around one million empty properties.

 

FACT 2:

The UK Revenue departments collect about £65billion a year in various forms of property taxes. The highest level of taxes in the world.