Much of today’s focus has been on Budget headlines and little
comment has been made of the detail supplied by the Office for Budget Responsibility (OBR), particularly about its view
of what is likely to happen to the
property market over the next 36 months.
According to the OBR the future looks bright and forecasts a dramatic
increase in stamp duty receipts by 2016, when it expects the Treasury to
receive £11.1 billion a year, nearly double the current level of
around £6 billion.
This suggests the OBR is expecting housing market to spring
back to life in 2013, with a 19% rise in transaction levels and a further 14% increase
in the number of sales in 2014.
This is based on the OBR’s expectation of an easing in credit
conditions in 2013
The
downside is the OBR has downgraded its housing price forecast expecting prices
to rise by only 0.5% next year. This is in line with independent forecasts
published this year.
Looking ahead the picture is even better as prices are predicted to
pick up more strongly in 2014, along with further strong rises in transaction
numbers.
Let’s hope the OBR is right with its predictions. The success of this budget clearly rests on
the generation of extra Stamp Duty suggesting the Government has put a lot of faith in the
OBR's assessment.
Morgan Jones and Pett are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877000 or via email at davidpett@m-j-p.co.uk
