ROOF Blog

Thousands of first-time buyers will be priced out of the housing market if the Treasury presses ahead with plans to offer new tax breaks to buy-to-let investors, campaigners warn today. The Treasury published a consultation paper in February which included plans to boost the supply of private rented housing. One key proposal was for professional investors to pay stamp duty separately on each home, even when they buy a large portfolio of properties, reducing their total bill. PricedOut, which campaigns on behalf of first-time buyers who are not able to enter the property market, says the proposal is grossly unfair to first-time buyers and would make their struggle to buy a house even more difficult. William Griffith, spokesman for PricedOut, said: ‘The large tax breaks that buy to let currently enjoys mean that they can always outbid first-time buyers. It is astonishing that the government is seeking to further entrench this disparity in the housing market.’

Cordea Savills, the funds arm of property services firm Savills, has launched the UK Income and Growth Fund to acquire prime assets in Britain’s recovering commercial property market. The fund is aiming to raise a total of 1 billion pounds over the next few years, and plans to deliver distributions to investors of over 5 per cent. ‘Despite uncertain prospects in the short term, we believe that UK prime commercial property is fairly priced and will perform well again once the occupational markets return to strength,’ fund director George Tindley said.

Evidence is growing that the worst is over in the recession-hit property market following a string of cautiously optimistic assessments from the UK’s leading housebuilders.

Persimmon set the tone this month when it predicted a moderate recovery. Barratt, the UK’s largest housebuilder, and Bovis Homes echoed that sentiment with similarly upbeat forecasts.

The number of new homes being built rose to its highest level for over a year in the three months to October, with work starting on 25,000 new properties, an increase of 27 per cent compared with the same period last year.

However, housebuilders are reluctant to be too bold over the prospects of a sustained recovery because of the fragility of the market and the uncertainty over the continuing availability of mortgages.

‘We are way ahead of where we were this time last year, but we’re not out of the woods yet and there could still be plenty of problems for the industry were the banks to pull back lending,’ said Bovis’ chief executive David Ritchie.

Britain’s estate agents have reported the most widespread surge in house prices since the pre-crash days of late 2006, with cheap money and a shortage of properties creating boom conditions in parts of the country.

In its monthly snapshot of the market, the Royal Institution of Chartered Surveyors (RICS) recorded evidence of gazumping and sales of £5m homes, and predicted that the pick-up in selling prices would continue over the coming months.

Although sales of homes remain around half the levels seen before the crash, a separate report also out today from the British Retail Consortium found that shops selling household goods and furniture were benefiting from a rising property market.

RICS spokesman Jeremy Leaf said: ‘Although the supply of property is beginning to pick up, it is still insufficient to keep pace with the increase in demand, which points to further price gains in the near term.’