Categorized | International

UK Housing Market Suffers Major Decline

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The month of March was not overly kind to the residential real estate market in the United Kingdom. Property prices dropped one percent, which is the largest pricing decline experienced in the nation in two years. The drop followed the government’s decision to end a tax exemption on residential real estate purchases made by first-time buyers.

 

Prices fell one percent from the previous month, and just shy of one percent compared to one year earlier. It was the first time in half a year that the United Kingdom experienced an annual price drop.

 

Without the renewal of the popular tax exemption, the housing market in the United Kingdom is expected to face a great deal of difficulty in the coming months. The elimination of the exemption, coupled with the worries of a debt crisis across Europe, is taking its toll on the UK real estate market.

 

As such, economists believe that prices may continue to drop for at least the next year. Even London may start to soon feel the effects of the troubled housing market.

 

In order to combat the loss of revenue from declining home sales, officials in the United Kingdom are considered increasing the stamp duty by two percent for those buying homes that cost two million pounds or more. The duty increase would raise two hundred and forty million pounds in the next year.

 

The stamp duty as a whole will raise another six hundred million pounds for the government in the United Kingdom. Those funds will help to boost government spending where it is most needed.

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About Nancy Raven

Nancy is the main writer for the International section of the website. Sometimes she also helps Drew out on the Finance/Mortgage section as well.

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