The announcement by Chancellor Alistair Darling to change capital gains tax from April 2008 could provide a boost to Cornwall’s first time buyers according to a local financial expert.
Peter McGahan, managing director of Worldwide Financial Planning, believes that the prospect of paying more tax from next year could encourage second home owners to sell sooner.
And with the increase in supply Mr McGahan believes we could experience a fall in prices.
“We’ve already seen a large number of second homes come onto the market as a result of the Bank of England’s last interest rise,” said Mr McGahan.
“Many people found their increased mortgage payments were higher than the rent they were taking, so as a result, decided to sell.
“This has been one of many factors which have contributed to falling house prices over the last two months.
“And now with the increase in capital gains announced, I would expect more properties to come onto the market as people aim to get the best from their investments before April 2008.
“Those individuals who were thinking of selling their commercial property or business are also very likely to lose out after April 2008, so expect to see a rush to the market between now and then
“In Cornwall it should also become easier for first time buyers to get on to the housing ladder. Furnished holiday lets, for example, are classed as a business asset. If they sell their asset after April 2008 most will see an 80% increase in capital gains tax. Expect to see a flood of these properties onto the market.”
With the debate on the housing issue in Cornwall steadily growing, and the rise of groups wanting more affordable housing, as well as those wanting fewer second homes, the news should be welcomed.
“It’s been difficult for many people in Cornwall, but if you look at the economy over a long period of time you’ll know that we’re always in the middle of the cycle,” said Mr McGahan.
“The best place recently to invest your money has been property, but we’re now seeing a change and we’re helping people invest in other areas.
“So younger and first time buyers should prepare to take advantage.”
For more information please contact Peter McGahan on 01208 816667 or email info@wwfp.net
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