Chancellor Alistair Darling has announced that stamp duty will be scrapped for homes below £250,000 for first-time buyers. Conversely, stamp duty on residential property sales over £1m to increase to 5% from April 2011 which is sure be received with some anger.
The Bank of England today kept interest rates at a record low of 0.5 per cent and made no increase to its unprecedented scheme of pumping money into an economy struggling to get back on its feet.
The decision was widely expected and analysts expect no change in monetary policy until much later this year as the central bank waits for a clearer recovery from the worst economic downturn since World War II.
If anything, BoE policymakers have left the door open to more monetary easing in the form of expanding their £200 billion scheme to buy assets with newly created money — quantitative easing in the jargon — if the economy worsens.
U.K. house prices probably won’t fall this year as the shortage of homes and low interest rates support the property market, the Royal Institution of Chartered Surveyors said.
“With housing supply continuing to be tight and interest rates likely to remain low, it seems unlikely that prices will dip again,” the London-based lobby group said in a statement. “Activity will still be constrained, so that recovery will continue to be slow, particularly outside of London and the southeast.”
Source: RICS
The pound has tumbled to a 10-month low as fears grow the UK will have a hung parliament in the forthcoming election.
The currency fell 1.7% to drop below the $1.50 level against the dollar for the first time since May. It has lost 7% against the dollar this year.
The pound also fell against the euro and most other major currencies.
The weak pound is good news for property investors, as UK house prices become cheaper to buyers from overseas.
Source: BBC