Partner at Bruton Knowles Peter Foyle comments on the budget, "As was widely anticipated this was another dull budget which gave little and took little, but there were a surprising number of mentions of property measures and some missing mentions which are worth consideration".

As you would expect with an almost neutral budget any concessions were meagre and this was certainly the case with the Chancellor’s increase on the stamp duty threshold from £120,000 up to £125,000.  It works as little more than a token gesture, doesn’t raise the threshold to a level in line with inflation and is unlikely to do anything to improve the first time buyer market in most of our region.  However Gordon Brown may feel he mitigated this decision by showing more support and funding for government backed shared ownership schemes, which give house buyers an opportunity to own a percentage of a property rather than having to fund 100% of the purchase price.

On a wider note this budget didn’t prove to be very supportive of the urban regeneration agenda, which is disappointing for Gloucestershire as we have so many schemes and developments planned across the region.  Many in the industry have been calling for the abolition of VAT on building renovation schemes to bring them in line with new builds which are VAT exempt.  VAT liable renovation costs affect the majority of urban regeneration schemes and yet the Chancellor left VAT in place in this budget.  He also declared his endorsement of the Planning Gain Supplement (PGS), proposed by Kate Barker last year.  Although we are waiting for more detail post public consultation, many experts fear that the proposed structure of PGS would make complex brownfield regenerations financially unviable and would stifle regeneration.  We will have to wait until later this year for more details on PGS to see if these fears are warranted.

To end on a more positive note the Chancellor did confirm details of the new tax efficient investment vehicle REITS (Real Estate Investment Trusts) including a launch date of 1st January 2007.   The details of the REITS vehicle look appealing and this should prove to be a positive property investment mechanism for many individuals next year.