He called it the “Budget for the next generation”, but how will the most recent changes affect you?
Overall, millennials have come off pretty well. First-time buyers have already been able to take advantage of George Osborne’s help-to-buy Isa and when it comes to the crunch point of buying the property, the government will top up savings by up to £3000 per person.
However, the lifetime Isa could be an option that is even more appealing. It’s been designed to address the UK’s current pension crisis and means that the tax-free Isa savings limit has been raised to £20,000 a year from just over £15,000. Osborne claims that “many of whom haven’t had a good deal from the pensions system”, will see greater returns for saving, receiving £1 from the government for every £4 saved, at a maximum of £4,000 a year.
It has been confirmed that the increase in Stamp Duty Land Tax (SDLT) for additional properties will also apply to larger investors. However, as many researchers have pointed out, property is still an incredible investment, it’s just going to take slightly longer to get your money back. Yet, in comparison to other investments, the returns are high and the product is tangible.
Commenting on the announcement, Martin Skinner, CEO of Inspired Asset Management, said:
“With the government adding £1 for every £4 saved, the new lifetime ISA will enable first time buyers to raise a deposit more quickly.
“It is concerning to hear though that SDLT for additional properties will apply to large property investors. The devil will be in the detail but it is clear that the government’s intention is to shrink the private rented sector.”
“As a result, we expect the shortfall in supply to continue and therefore both house prices and, even more so now, rents to continue to rise quite rapidly. Once tenants’ complaints about rising rents start to echo around Westminster (as they inevitably will) then the Government will need to look at countering some of their recent anti BTL/PRS policies to attract the investment that will be needed.”