New UK Housing Measures Don't Cut It, Says Adviser

by Robin Pilgrim, LawAndTax-News.com, London

04 September 2008

The package of new measures introduced by the UK government to ease current challenges in the housing market will help some first time buyers make the leap onto the property ladder, but will not get the market moving, Marios Gregori, Director of Corporation Tax at PKF accountants & business advisers has warned this week.

“The package announced today is welcomed, but does not go far enough,” Mr Gregori announced on Tuesday upon hearing Chancellor of the Exchequer, Alistair Darling's plans to increase the stamp duty land tax threshold for purchases of residential property.

The relief will apply to transactions with an effective date on or after September 3, 2008, and before September 3, 2009.

It will provide an exemption from stamp duty land tax for land transactions consisting entirely of residential property where the chargeable consideration is not more than GBP175,000.

“The extension of the nil-rate band for Stamp Duty Land Tax (SDLT) on residential property from GBP125,000 to GBP175,000 will help some across the country, but exempting properties up to GBP250,000 would have had much more of an impact," Gregori went on to state, continuing:

“The extension will encourage more shared equity schemes with the percentage share bought by first time buyers having a value of around GBP170,000, especially as the government’s new HomeBuy Direct scheme, worth GBP300mn, aims to help up to 10,000 first time buyers.

“It is just unfortunate that the scheme has the same name as the ill-fated Homebuy Direct Ltd – the company which owned Farepak, the Christmas hamper company, and went bankrupt two years ago. I hope this HomeBuy Direct fares better," Gregori pointed out, going on to further remark:

“House builders are increasingly turning to shared equity schemes to help shift their stock of completed properties, but financing such deals themselves puts them under increasing financial pressure. HomeBuy Direct will only help a small percentage of the market so, for the bold, there is considerable scope for venture capital investors to get into this market."

Mr Gregori concluded by stating:

“Today’s measures go some way to helping the residential sector, but the commercial property sector has again been neglected."

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