Andy Szebeni, spokesperson for the Association of Leasehold Enfranchisement Professionals (ALEP) said:
“ALEP hopes that the Budget would bring some relief to hard-pressed owners of leasehold property – both flat owners and freeholders. The property market is stagnant in most parts of suburbia where leasehold flats are very common. Owners of flats and leasehold houses here would benefit from some Stamp Duty reliefs at the lower end for first time buyers who are currently locked out of the market. The property sector was until five years ago a major engine for growth and can be again with some stimulus for leasehold property owners.”
The 2011 Budget on 23 March included a number of changes that will bolster the residential leasehold sector, which ALEP welcomes. They include:
Creation of the FirstBuy programme
The Government will provide an equity investment, jointly funded with house builders, through a FirstBuy programme assisting over 10,000 first-time buyers to purchase a new-build property. The £250 million will be for first time buyers to purchase a new-build property.
The government believes it will strengthen demand for residential property by reforming the Stamp Duty Land Tax (SDLT) rules applied to bulk purchases. This will reduce a barrier to investment in residential property, promoting private rented housing supply. Specifically, if the buyer chooses, the rate of SDLT on purchases of multiple residential properties will be determined by the mean value of the dwellings purchased (subject to a minimum rate of 1%). The outcome of the review of SDLT tax relief for first time buyers is due in “Autumn 2011”.
Support for REITs
Subject to informal consultation, the Government will legislate in Finance Bill 2012 to support good business practices and remove barriers to entry, and investment in, the Real Estate Investment Trusts (REITs) regime, including removing the REITs 2% conversion charge. The government believes “This will encourage investment in the private rented sector over the longer term”.
Consultation on proposals to make it easier to convert commercial premises to residential use.
The government will introduce a new presumption in favour of sustainable development, so that the default answer to development is ‘yes’. The chancellor called the current planning system ‘cumbersome’.
Continuation of SMI
Homeowners facing difficulties will be helped by the extension for a further year of temporary changes to the Support for Mortgage Interest (SMI) scheme. The 13-week waiting period and £200,000 limit on eligible mortgage capital will now remain in force for new working age SMI claimants until January 2013.
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