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Five Ways the Autumn Statement 2016 Will Affect the Property Market

From a cessation of letting agent fees to £1.4 billion earmarked for affordable homes, the Autumn 2016 statement has an impact on several fronts.

  1. £3.15b reserved for 90,000 new London homes

This is the highest investment that City Hall has ever secured for housing, but Mayor Sadiq Khan warned London residents that the process would involve a long haul and wouldn't provide a quick fix. The money will be used for housing tenures (including properties rented at below market value for lower-income residents) and homes available for rent at a maximum of one-third of average household income for middle-income Londoners.

There will also be an increase in shared-ownership properties for those who can’t yet afford to buy on the open market.

  1. £1.4b is being dedicated to the construction of 40,000 affordable homes

This initiative recognises the difficulties faced by first-home homebuyers attempting to save large deposits. Property experts welcome the assistance, but warn that too many new homes are needed for the scheme to be successful. Mark Hayward, National Association of Estate Agents managing director, said that the details in the upcoming housing market white paper will be important.

Structural Defects Insurance

  1. England and Wales will ban letting agents' fees

Rents have greeted this intended ban with overall approval, having long felt taken advantage of by excessive administration fees. Letting agents are, predictably, protesting and saying that the difference in income will be recouped via higher landlord costs, which could in turn raise rent for tenants. However, Legal & General Housing Partnerships director Stephen Smith said that when Scotland banned these fees in 2012 there was no appreciable impact on rent amounts or availability of rental accommodation.

  1. A housing infrastructure fund valued at £2.3b is being launched

This find is intended to deliver 100,00 new properties in areas with higher demand but Jeremy Leaf, former residential chairman for the Royal Institution of Chartered Surveyors, said that there is little information at present as to when and how the homes will be delivered and how it will affect housing availability.

  1. There was no stamp duty charge reversal for second homes or elimination of mortgage tax relief cuts

There has been a decrease in the number of landlords buying investment properties thanks to the stamp duty increases last April and the announcement of mortgage relief cuts for rented properties. According to some, this is good news for first-time home buyers because competition in the starter home market is reduced, while others warn that fewer rental properties will be available to meet the needs of an increasing number of renters.

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