Implications of 2017 Budget For Foreign Property Investors
Housing has been a big focus of the Tory government despite the fact that its flagship programme has failed to deliver a single home in 3 years!
So, the budget offered a chance to further legislate against the crisis in housing that grips the country. Therefore, unsurprisingly, the primary measures focus on the domestic market and attempts to boost home ownership, rather than foreign property investors.
The biggest housing story to come out of the budget was the abolition of stamp duty on properties under £300,000 for first-time buyers. The reception to this ostensible generosity has been mixed with many suggesting that all this will do is simply push up prices for first-time buyers. Whether it does or doesn’t is not the focus of this article so let’s move swiftly on.
The other major announcement was £44bn set aside to build 300,000 houses a year by 2025 which will go into guarantees to encourage private house-builders, regeneration schemes and other government involvement in the sector.
So, what, if anything, do these measures mean for foreign property investors?
In all honesty, not much in direct changes. The one measure directed specifically at investors was the deferment until April 2020 of the requirement for investors to pay capital gains tax on profits within 30 days of the property sale.
Possibly the biggest take-away is that with the government acknowledging that home ownership is impossible for many and their focus on the buy-to-let and rental market suggests that there will be no regulation of the market that is negative to investment as the government is keen to keep private funds flowing into the house-building sector.
Therefore, the biggest implication for foreign and indeed domestic investors, is that things will continue much as they have been – that is; an under-supply of housing in the face of increasing demand and therefore the UK will remain a fertile ground in which property investors can grow their portfolios and profits.
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