UK Budget set to drive demand for homes
Whilst there were no huge surprises in George Osborne’s budget today, a few rulings may have ramifications for the property market with changes to pensions and ISAs potentially introducing swathes of new buyers to the market.
Those reaching retirement age will now be able to sell their pension annuity to a third-party for a lump-sum payment, meaning retirees are now open to investment avenues previously closed to them. With property becoming an increasingly popular stream of income for retirement, we may well witness a growth in demand amongst this demographic looking for a financially secure future.
Likewise, help for first-time buyers was announced with a saving scheme whereby the government will contribute£50 for every £200 saved towards a mortgage deposit, (up to a maximum government donation of £3,000) on properties valued at no more than £250,000 outside of London and £450,000 within.
Despite the creation of 28 housing zones outside of London, estimated to provide 45,000 homes, the consensus within the industry is that this will do little to alleviate the housing shortfall. Figures show 141,000 homes were built in 2013/14 – only half the number needed to meet the growing demand.
And finally, a focus on regional markets looks set to define future investor interest. The government made steadfast its commitment to its Northern Powerhouse vision with specific powers granted to Manchester, Cambridge and Peterborough to drive their own city-specific infrastructure and re-gen plans. This coincides with CBRE’s 2015 outlook published earlier in the year that predicted a return of investor interest to prime regional locations.