Issue 2

Find out how this year’s budget affected UK home owners.

What is the budget?
The budget is the UK’s annual financial statement from the government.  It’s the responsibility of the Chancellor of the Exchequer and includes a review of taxation levels and announces spending plans for the year ahead.

How did this year’s budget affect UK home owners?
This year’s budget was fairly uneventful for UK home-owners.  In his first budget announcement, Chancellor Alistair Darling made few changes that are likely to impact the UK housing market.

• Shared Equity Schemes for key workers and first time buyers
  One positive announcement was that the government will be launching new shared equity schemes in April 2008.  These will enable key workers and first time buyers to borrow money to make up the cost of their home, allowing them to get on the property ladder.  From April, borrowers will be able to borrow up to half of the mortgage value from a shared equity scheme, where in the past they would have been limited to borrowing up to 25%.

• Another bonus for these buyers is that they will not be required to pay stamp duty if their share in the property is worth less than 80%.  It’s not a case of now and never though, as stamp duty will need to be paid when buyers increase their share to more than 80%. 

• Flexible and affordable Fixed Rate mortgages
  In a move to provide greater stability for borrowers and encourage innovation from banks and building societies, the Chancellor announced that he wanted to see more lenders offering “flexible and affordable” fixed rate mortgages, of up to 25 years.

• More homes
  Sites for another 70,000 new homes have been identified across the UK.  The full details of these have yet to be confirmed, these will assist the government’s target of building 3 million more homes by 2020. 

This year’s budget may have proved to be uneventful for home-owners but it’s unlikely that the market will be the same.  2008 is on target to be another tough year for the UK mortgage industry so if you’re thinking of a mortgage or remortgage – act fast to secure a competitive deal!

One thing you may not know about the budget…
The Chancellor is traditionally allowed an alcoholic drink while delivering his speech – this is the only time that alcohol is allowed in the Chamber.

[Source: HM Treasury March 2008]