UK Budget Speech 2008 - Alistair Darling has Some Good News for Property Buyers and Investors

Today the Chancellor, Alistair Darling, delivered his budget speech, so I thought I would pass on a few thoughts on the bits that relate to UK property. If you would like to see the whole speech, click here.

• From this April, key workers in the UK such as teachers and nurses, will be able to borrow money from shared equity schemes. Stamp duty on shared ownership homes will not be required until people own 80% of their home.

This budget measure is a significant helping hand and should be the leg up many key workers need to get their own property. Interestingly enough we had a question by one such person on our forum about this issue: The lady in question, writing under the forum name Alistair (spooky coincidence), should feel the benefit of this.

• More people should have the chance to have a long term fixed mortgage, the Chancellor said.

If the Government is serious about this, I’m sure they could do something tomorrow. Basically there can be little or no reason why all borrowing can’t be at a fixed rate from the moment the mortgage is taken out. Investment banks are able to agree lending rates in advance, so why can’t they fix rates for long term loans? I realise the answer is - because they make more money this way.

• Alistair Darling said in his budget speech that a report showed that long term fixed rate mortgages can reduce the risks for first time buyers and can keep them on the housing ladder.

I totally agree. If borrowers know that their monthly mortgage payments are stable, then they can budget their household expenditure accordingly. Interest rates usually go up in increments of a quarter percent. This equates to an increase in the monthly mortgage of £20.83 per £10,000 borrowed.

• Sites for 70,000 more houses have been identified, Mr Darling said.

This is great news for all involved with property, which is what makes it the unique and exciting investment vehicle that it is.

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