An estimated third of employees spend at least some of their week working from home with high speed broadband rising up the criteria list for new house buyers. Evidence suggests that broadband speeds could affect the price that buyers end up paying for their next move.
An analysis of average house prices and broadband download speeds by local authority reveals that buyers spend, on average, 17% more for properties in areas with superfast broadband compared to areas where average speeds are less than 25 Mbps.
Some of this will be related to where broadband providers have historically focused their investment, ie, in more affluent areas, but with the major providers increasing their coverage, this effect will become more diluted. Indeed, the Government has committed to provide superfast broadband (at least 24Mbps) to at least 95% of UK premises.
There are a myriad of factors that affect local property prices but the influence of broadband speeds should not be underestimated with its importance to buyers set to continue to increase.
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After months of hard work, our new website finally went live over the weekend and is looking fantastic! Why not have a good look around and see what amazing new features and information are included.
Our new banner has arrived today ready for tonight, and it looks great!! We are proudly sponsoring the Pink Wig event which is part of Falmouth Week and raises funds for vital research projects, the best care for breast cancer patients in Cornwall and a safer future for the next generation.
Compared to the Stamp Duty overhaul last time round, the July budget was less dramatic for the housing market but still had a couple of notable changes.
A new “family home allowance” is being introduced, to remove inheritance tax from families whose wealth primarily consists of the home. This adds £175,000 per person to the existing £325,000 IHT allowance.
Like the standard allowance this is transferrable across married couples and civil partnerships to give a total theoretical allowance per couple of £1m.
The “family home” element is important though: since it’s ringfenced, estates with a home valued less than £350,00 (£175,000 per person) cannot transfer that allowance to other assets. That said, it seems unlikely that many £1m+ estates will have a home under the £350,000 limit.
There’s one exception to this: where homeowners downsize to a smaller property they will be able to retain the allowance from their previous residence – effectively the cash they realise from that sale is still protected from inheritance tax.
That’s a welcome move in that it won’t make older homeowners feel they have to stay in larger properties than they need (taking them out of the market for younger families) but still some critics argue that by creating a tax incentive for property over other assets, this may drive up house prices further.
Buy to Let Interest Relief
On the flip side to the inheritance tax cut, landlords face a tax increase.
Currently landlords can offset the cost of their BTL mortgage interest against income tax: so a mortgage costing, say, £5,000 per year in interest allows for an extra £5,000 of income to be earned tax-free.
Under new rules that tax relief will be limited to the basic rate of income tax, currently 20%. So landlords paying higher (40%) and additional (45%) rates will end up paying income tax at 20% and 25% respectively on that money, where previously they paid nothing. Basic rate taxpayers will be unaffected.
There’s no need to panic yet though. The change is to be phased in over 4 years, and doesn’t start until 2017. While the precise structure hasn’t been announced yet, clearly the impact is designed to be gradual and give landlords plenty of time to review their options. And after all, there is still that 20% tax relief not available on other investments.
However limiting the tax relief adds strength to the argument that landlords need to keep on top of their funding, and make sure they’re not paying more interest than they need to.
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