22
The Isle of Wight Gazette Friday SEPTEMBER 12 2008
Property
PM’s cut in stamp duty not enough on its own THERE has been a cautious response on the Island to the 12-month stamp duty holiday announced by the Government to try and help struggling home buyers.
For the next year, properties sold up to £175,000 will be exempt from the unpopular tax, with the threshold going up from £125,000, potentially saving buyers up to £1,750 on their purchase. This relief will apply to all transactions from September 3 this year to September 3, 2009. But the general feeling from Island estate agents is that although the Chancellor Alistair Darling’s measures are “a small step in the right direction”, more still needs to be done to regenerate the housing market. Simon Wratton, head of Island-based estate agents Fox Property, summed up the mood. He said: “I would have liked to have seen stamp duty abol-
By Jamie White ished on houses up to £200,000. Until mortgage rates start coming down to affordable levels without buyers having to put down large deposits, I don’t think this will make a big impact. “It will help a bit but there are so few first time buyers around that there are not enough people to start the housing chain moving. It would be nice to see a cut in interest rates and then the banks would have to follow with mortgage rate reductions.” Mr Wratton predicts it will be at least another 12 months before the housing market becomes buoyant again. He added: “ I think there will be one cut in November, another in the first couple of months of next year, and a third by Easter. We need those three drops, and until we get them the government measures will not start to work. Sales are being
achieved, but only where sellers are being realistic with their prices. Even so, I reckon we are in for a long winter.” Mark Jenkins, of Shanklin based estate agents Webb and Jenkins, said; “ Although I welcome any move to help the housing market, I still feel it is too little too late. I would have liked to have seen a stamp duty freeze across the whole market, and I can’t envisage this revitalising house sales, although it might help to a degree. “Really we need interest rates to come down and then banks and building societies relaxing their lending to get things going. I’d like to remain optimistic, and hopefully things will improve. However, I don’t think we have seen the bottom of this yet.” The rate of 3 per cent still applies to properties worth more than £250,000, and 4 per cent if the property is worth more than £500,000. The latest house price figures from Nationwide Building Society put the average cost of a home in the United Kingdom at £164,654, which is below the new stamp duty threshold. Treasury experts claim that half of property transactions would be free of stamp duty as a result of the
latest measures. However, there is some scepticism about the value of a stamp duty holiday to the wider market. Government sources have stressed that the move was designed to help individual families rather than boost the troubled market. “Grant Shapps, the Conservative shadow housing minister, said: “This measure turns out to be far less significant than Gordon Brown would have us believe. It has become clear that far from being a rescue plan for the housing market, this is a desperate attempt to rescue the Brown Government”. Stamp duty rakes in an estimated £6.5 billion for the Treasury each year, but the stamp duty cut is set to cost the Government as much as £600 million. However, the Treasury would not say how the £600 million estimate was drawn up, saying it does not publish its assumptions and forecasts about the housing market. With the latest mortgage approval and house sale data suggesting that sales this year could be as much as 50 per cent down on a year earlier, some experts believe the Treasury has over-estimated how much the stamp-duty scheme will actually cost.
To share or not to share TWO schemes to help first-time buyers step on By Jamie White to the housing ladder are now available on the on the Island to see if a Shared Ownership property Island.
The two options on the Island are Shared Ownership and Homebuy. Low cost home ownership has been introduced to help those who cannot afford to buy a home outright. Through shared ownership a share of the property is bought and rent is paid on the remaining share that is not owned. Shared Ownership is a scheme where properties are built and developed, in conjunction with the Housing Corporation and the Isle of Wight Council. An initial share is bought - usually around 50 per cent of the value of the property - with a monthly rent and service charge payable to the association on the remaining share. After one year further shares can be bought in the property, offering the opportunity to eventually own the home outright. Anyone interested in a shared ownership property should first register on the Island Housing Register. Anyone can then contact all the housing associations
is being developed in an area of interest. Homebuy gives those who qualify the chance to buy a property on the open market, with the assistance of an equity loan of up to 25 per cent of the purchase price of the property. The remaining 75 per cent has to be funded with a mortgage, savings or a combination of both. There are no monthly repayments on the 25 per cent equity loan, instead the loan is paid back when the home is sold, or the 25 per cent the association owns is bought back. People interested in a Homebuy shared ownership property should first register on the Island Housing Register. Southern Housing Home Ownership, who has joined with South Wight Housing Association run and operate the scheme on the Island. Anyone interested in the Homebuy scheme can get more information by going to www.iwight.com or www.homesinhants.co.uk.
If you have any interesting property news that you would like advertised in The Gazette then please call Jamie White at wightfrog.com on 01983 409520 Send your news to newsdesk@iwgazette.co.uk or tel. (01983) 402599