Rise in CGT 'could make property market more competitive'

Posted: 25 Jun 2010 11:11:38 GMT

A rise in capital gains tax (CGT) announced in the Budget earlier this week by George Osborne could result in the UK's property market becoming more competitive.

This is according to Helen Adams, managing director of FirstRungNow.com, who said that it may lead to more landlords selling their residences.

In turn, this would potentially result in house prices falling due to the principles of supply and demand, she noted.

Ms Adams stated: "Maybe it might make more properties available for a first-time buyer, which would be good."

However, she added that mortgages are not as cheap as they could be at present.

The expert said that considering how much interest rates have fallen, home loan rates "haven't gone down as much".

Mr Osborne's decision to raise CGT came amid a range of measures designed to reduce the size of the government's budget.

Some people fear the speed at which it intends to do this could result in a double-dip recession.


© Houseladder Ltd