On Monday 29th October 2018, Chancellor Phillip Hammond announced his Autumn Budget and we’ve highlighted some of the updates below.
Stamp duty for first time buyers – first time buyers in England and Northern Ireland don’t pay stamp duty on properties costing up to £300,000. This will be extended to shared ownership homes costing up to £500,000. This comes into effect from Budget day, but is also applied retrospectively to purchases of shared ownership properties since the Budget last year (November 22nd).
Help to Buy Equity Loan – this will run until March 2023. However, from April 2021, there will be regional price caps introduced in relation to the price of properties you can use it to buy. The loan will only be available to first time buyers who buy properties costing up to £186,100 in the North East of England to a maximum of £600,000 in London. The price caps are set at 1.5 times the regional average first time buyer price.
Shared ownership – the government wants ideas on how to deliver a new wave of shared ownership homes.
Discounted homes – the government wants to let up to 500 parishes grant permission for homes to be sold at a discounted price to local people.
Flood risk – the government will allocate £13 million to pilot projects to make sure that property owners have the best information about how to protect their homes from flooding. It will also expand the flood alert system to an extra 62,000 homes at risk of flooding.
Breathing space – people who are struggling to payback their debts will be able to get a 60-day break when charges will be frozen. They will only qualify for breathing space if they have contacted a debt adviser and have been assessed as being in ‘problem debt’. They also wouldn’t be able to get breathing space if they’d already done this in the last 12 months. However, if they have mental health problems, they there is no requirement that they would have had to have seen a debt adviser. The breathing space may be triggered by them being seen by the crisis mental health team.
No-interest loans – the government is looking at trialling a scheme for no-interest loans to help those who would otherwise turn to payday lenders.
Social landlords and affordable credit – the government will change the rules so it’s easier for social landlords to refer tenants to credit unions and other alternatives to payday lenders and doorstep loans.
Financial inclusion – a new independent body will be responsible for promoting financial inclusion – namely, making sure that more people have access to bank accounts and other financial products. The government is making £55 million available from the dormant bank account fund. This was announced in August.
National Living Wage – this will rise by 4.9% from £7.83 an hour to £8.21 an hour from April 2019. It’s only paid to those aged 25 and over.
The rate for 21 - 24 year olds will rise from £7.38 to £7.70 an hour.
The rate for 18 – 20 year olds will rise from £5.90 to £6.15 an hour.
The rate for 16 – 17 year olds will rise from £4.20 to £4.35 an hour.
Apprentices will get an extra 5.4% – taking their hourly rate from £3.70 to £3.90 an hour.
Universal Credit – the government is giving £1 billion to help the introduction of Universal Credit. It will also increase the Work Allowance by £1,000 from April 2019. Currently the Work Allowance is between approximately £200 and £400 a month.
Please get in touch with us to discuss any of these changes.