{"id":6099847,"date":"2024-03-06T21:23:53","date_gmt":"2024-03-06T20:23:53","guid":{"rendered":"https:\/\/www.buyassociationgroup.com\/en-gb\/?p=6099847"},"modified":"2024-03-06T21:23:53","modified_gmt":"2024-03-06T20:23:53","slug":"spring-budget-2024","status":"publish","type":"post","link":"https:\/\/www.buyassociationgroup.com\/en-gb\/2024\/03\/06\/spring-budget-2024\/","title":{"rendered":"Spring Budget: What’s in it for the UK property sector?"},"content":{"rendered":"

In what is expected to be the final budget before the upcoming general election this year, Chancellor Jeremy Hunt made some predictable and not so predictable announcements.<\/strong><\/p>\n

There were high hopes that this spring budget was going to contain more measures to alleviate some of the issues facing the UK property sector at the moment; including affordability issues, not enough new homes being created<\/a>, and difficulties within the private rented sector.<\/p>\n

Many in the industry have been asking for tax changes that would stimulate the market, such as changes to stamp duty or a reversal of the Section 24 mortgage interest relief changes that could bring more much-needed homes to the rental market. More help for first-time buyers was also called for by many in the spring budget.<\/p>\n

Below are some of the main points from the spring budget<\/a> that are likely to affect the housing market.<\/p>\n

The main points for housing in the spring budget<\/h4>\n

Capital gains tax:<\/strong> One of the most positive points to come out of the spring budget for landlords and property investors was the capital gains tax cut, as the rate was scrapped from 28% to 24% on property. This means that when investors do come to divest their assets, they will keep more of the property’s profit.<\/p>\n

Comments from the industry on this move were mixed, with Edward Heaton, founder of buying agency Heaton & Partners, saying:\u00a0\u201cThe reduction in capital gains tax upon the sale of property is certainly to be welcomed and is likely to release more stock to the market in the coming months and years.”<\/p>\n

At the same time, Mark Harris, chief executive of mortgage broker SPF Private Clients, commented: \u201cIs there going to be a flurry of sales from landlords because they will make a saving on capital gains tax? No, they are in it for long-term gain, capital appreciation combined with income yield.\u201d<\/p>\n

Stamp duty:<\/strong> Rather than bringing in a permanent higher threshold for first-time buyers, or removing the 3% second property surcharge, which has been called for to stimulate investment, Jeremy Hunt announced the end of multiple dwellings stamp duty relief in his spring budget.<\/p>\n

This relief was applicable when people were buying multiple properties in the same transaction, such as when buying two or more flats within the same block from a developer. It often led to a lower tax bill for the buyer, but this relief has been abolished.<\/p>\n

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Camilla Dell, founder of Black Brick, said: \u201cMany of our buy-to-let clients purchase six or more properties and benefit from lower rates of SDLT as a result.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

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\u201cThey are providing much needed rental supply into the market and without this tax break it is yet another deterrent towards investment into the private rental sector. Not good news for tenants as fewer landlords results in higher rents.\u201d<\/p>\n

Short-term rentals:<\/strong> In recent years, the short-term rental sector has boomed as some landlords have found it more profitable than long-term lets, while others have simply capitalised on the increase in the number of people holidaying in the UK or using short-term accommodation options for work.<\/p>\n

The spring budget revealed that the tax relief available on furnished holiday lets in England will be removed from April 2025 – later than many of the other measures will come into play – to try and boost the number of properties being let on a long-term basis instead.<\/p>\n

This will mean that short-term and long-term lets will be treated the same for tax purposes, in terms of what reliefs can be claimed.<\/p>\n

No 99% mortgage:<\/strong> This was something that was widely expected to be introduced as a government-backed scheme to stimulate the housing market, after it had been leaked that the Chancellor was considering this for the spring budget. However, this is not something that will be introduced at this point.<\/p>\n

More spring budget reactions<\/h4>\n

As ever, parts of the spring budget announcement were welcomed by some in the industry, while others criticised a lack of real change or progression to help the industry.<\/p>\n

Paresh Raja, CEO of Market Financial Solutions<\/strong>, said: “In his attempts to woo voters before the upcoming election, the Chancellor missed a trick by not bringing forward more meaningful, positive policies for the property market. But we knew that was likely to be the case.<\/p>\n

“Cutting property CGT rates will be welcomed in some quarters. But elsewhere, after years of tightening regulation in the buy-to-let market, the Government has indeed now moved to put the squeeze on holiday lets. Ensuring there are ample properties available for local homebuyers in tourist hotspots makes sense, but it is regrettable that the solution is always to target investors and penalise landlords rather than boosting supply through greater investment into housebuilding.<\/p>\n

“We also have to be alert to the fact that scrapping non-dom tax rules risks damaging the appeal of the prime London property market among international investors. Time will tell how plans for a shorter-term non-dom-style tax status might take shape, but given Labour was already pushing to scrap non-dom status, we should not expect much relaxation in this reform.<\/p>\n

\u201cThat there was so little by way of stamp duty reforms, housebuilding commitments or ways of incentivising landlords to invest in their properties – particularly for energy efficiency purposes – was disappointing. It was telling that Hunt praised the Government for having overseen the building of 1 million new homes in this parliament, even though this figure falls well short of what is needed in a five-year period. Meanwhile, suggestions of new 99% mortgages did not come to fruition.<\/p>\n

\u201cUltimately, after two years of rising interest rates, today’s Budget would have been an opportune moment to bring about a string of policies and reforms to boost the property market. It feels like a missed opportunity.”<\/p>\n

Richard Davies, Director of UK Operations at Chestertons<\/strong>, says of the spring budget: \u201cStamp duty is a major financial burden on buyers that has seriously restricted the freedom with which people can trade up and down to fit their personal circumstances. To make it more economically viable for people to move home as and when their circumstances require, we would have liked to have seen the Chancellor make an adjustment to the current stamp duty thresholds or at least introduce an exemption for downsizers and first-time buyers, which could have boosted the number of larger family homes that are being put up for sale and helped more people get onto the property ladder.\u201d<\/p>\n

\u201cDespite mortgage rates coming down a bit from their highs last year, rates are creeping up again and first-time buyers need all the help they can get. The Chancellor\u2019s decision to not extend the SDLT relief for first-time buyers is disappointing news. Whilst this could lead to more first-time buyers rushing to buy a property before the relief ends in 2025, it will eventually make it that much harder for future first-time buyers to get on the property ladder.\u201d<\/p>\n

To keep up to date with what’s going on in the UK housing market, read our news section.<\/a><\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

In what is expected to be the final budget before the upcoming general election this year, Chancellor Jeremy Hunt made some predictable and not so predictable announcements. There were high hopes that this spring budget was going to contain more measures to alleviate some of the issues facing the UK property sector at the moment;… Read more »<\/a><\/p>\n","protected":false},"author":1069,"featured_media":6091364,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[59,6],"tags":[243],"acf":[],"_links":{"self":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts\/6099847"}],"collection":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/users\/1069"}],"replies":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/comments?post=6099847"}],"version-history":[{"count":5,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts\/6099847\/revisions"}],"predecessor-version":[{"id":6099857,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts\/6099847\/revisions\/6099857"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/media\/6091364"}],"wp:attachment":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/media?parent=6099847"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/categories?post=6099847"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/tags?post=6099847"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}