In what will be welcomed news by the government the construction industry has at last started to pick up and is now growing at it’s fastest rate since 2003. The construction industry has seen a slump in recent years as the recession took hold and no new homes were built. It is not just residential properties that are now being built but there has also seen a pick up in commercial properties being built and civil engineering. This is all good news for George Osborne who will say this is more evidence that his policies are working and that we are moving forward at last.
The Chancellor will be glad to see the construction industry showing signs of strong growth as it accounts for around 6% of the UK economy. The resurgence has been put down to confidence returning to the residential and commercial property sector with developers able to borrow at favourable rates as and a big upturn in the number of buyers looking to get onto the housing ladder. With 2014 looking to be a very good year for the housing market developers are snapping up sites and are hoping to cash in. The number of buyers looking for a home is now approaching record levels with buyers looking to get on the ladder before the government withdraws the Help To Buy Scheme.
The Chancellor George Osborne has said that the government will change the rules on non UK residents in 18 months time. Currently the rules are deemed as unfair because a non resident UK property owner may buy and sell a property in the UK without paying any tax on ant profits. The same does not apply to UK residents who have to pay capital gains tax when they buy and sell a property and make a profit. The move has been welcomed by UK investors who have long said that the regime is unfair and favors overseas landlords. There are many people that believe that this has been a major driver in house price increases in the capital as overseas buyers look to take advantage of the favorable tax regime.
This is seen as an attempt by the government to level the playing field and to treat UK residents fairly. It is also hoped that this may reduce the demand for property in the capital and quell the price increases that we have seen so far in 2013. 60% of the homes that have been sold in London have been sold to overseas buyers and most of those sales have been purchased with cash. Whilst this will be welcomed by London property owners it is pushing Londoners out of London and London workers are being forced to commute because they can’t afford to live in the capital.