Property round-up for 2018
Although perhaps not the most active year in the property world, 2018 did provide announcements of future changes for this and coming years.
House prices grew at the slowest rate in almost six years, with prices in London falling by 0.3% to the year ending September 2018. The uncertainty caused by the ongoing Brexit process is the key factor in the reduced growth. The generally accepted prediction for next year is that prices are going to “flat line”, creating an opportunity for those looking for their first step onto the property ladder.
The Autumn Budget brought further good news for first time buyers, extending the First Time Buyer’s Relief on Stamp Duty Land Tax to those purchasing shared ownership properties. The Help to Buy Equity loan scheme was also extended for a further two years to March 2023.
The Bill banning agent letting fees was drafted, amended and then unanimously passed on its second reading in May 2018. The Bill is likely to be made law in 2019 and will include measures to cap the amount of deposit that can be held by landlords, as well as restrictions on letting fees. The law will create a financial penalty of up to £30,000 and repeat offenders could face criminal charges.
Restrictions on Tax Relief
The restrictions on income tax reliefs for landlords continue to be introduced. From 1 April 2018 landlords and investors can only claim relief on 50% of their mortgage interest with a 20% tax credit on the rest. This will continue to be phased in until April 2020, after which the ability to offset the mortgage interest will be completely removed.
Stamp Duty Land Tax
The surcharge for those buying additional properties remained in full force and looks set to stay. This has resulted in longer chains, with more people finding themselves unable to purchase without first selling their home and transactions are taking longer to complete. The Government is also undertaking a consultation in January 2019 to introduce a surcharge for overseas investors, although it is now widely believed that this will be set at 1% rather than the previously rumoured 3%.
If you have any questions or would like to discuss the impact of any of the future changes please or any other residential property issues please contact Krupa Shah on 020 7288 4715 or by email at firstname.lastname@example.org
You can also contact one of our other solicitors in the residential property team here.