UK property market experts have predicted that although the difficult measures implemented in the recent emergency budget are generally for the best in what are difficult and parlous circumstances, they will, nevertheless, do little or nothing to stop the fall of residential property prices in the UK. Despite the fact that the lower-than-expected increase in Capital Gains Tax has been widely welcomed within the UK real estate industry, many analysts have commented that the rise will impact upon the buy-to-let sector, thereby discouraging private rental landlords.

According to Yolande Barnes, the head of residential research at Savills, the emergency budget supported Savills’ analysis that the general UK housing market will experience a second fall in values during the course of the next one-two years. ‘We anticipated as long ago as the summer of 2009 that the housing market would see further falls in 2010. The Chancellor today outlined some of the forces and factors behind this prognosis and gave us no reason to revise our views,’ Ms Barnes commented.
 
‘The pain will fall on just about every household in Britain and this will undoubtedly curb consumer confidence. The effect will be to suppress spending and that will include spending on homes. Some markets have already stalled in the run-up to the Budget and it is probable that post Budget sentiment will continue to suppress transaction levels,’ she added.

As the cuts put forward in the emergency budget are harder on some regions than others, properties in the north of England may well suffer the most, according to Ms Barnes. ‘More worrying is that austerity measures will work against mortgaged owner occupiers and will pose a real threat to those seeking to re-mortgage,’ she concluded.

On more welcome news, she enthused about government plans to examine the effects of the recent stamp duty holiday, perhaps in an efforts to transfer the burden of the stamp duty tax from the buyer to the seller.

 ‘We continue to urge the Government to consider transferring the burden of this tax from buyers to sellers. This would have the effect of removing the barrier to first time buyers at no cost to revenue,” she said.