On Wednesday, Chancellor Jeremy Hunt outlined the details of his much-anticipated ‘Spring Budget’ – the last fiscal event before the next election.
It was an announcement that many property market experts had been waiting on with baited breath, poised to see which predictions for housing reform might come to fruition.
As it turned out, the most noteworthy policies from the 98 page red book weren't what was predicted, with much of the focus on boosting employment and the economy.
However, far from being bad news for the property sector, those taking a bigger-picture stance have conceded that this can only be a good thing, for a stronger economy... inevitably equals a stronger property market.
It is, of course, somewhat of a disappointment that the much-hyped ‘game changing’ mortgage shakeup (specifically, the 99% mortgage scheme to incentivise first time buyers) failed to materialise, along with any significant policies and reforms to benefit renters, landlords and homeowners.
However, the measures that have been laid out, are not to be underestimated in terms of the knock-on benefits they might bring to the supply and demand dynamic.
These changes mainly include amendments to property taxation (including Stamp Duty and Capital Gains Tax), and also plans for ongoing housebuilding projects, particularly in London, which might be relevant to a small number of sellers and home-buyers:
Capital Gains Tax
On residential property sales, CGT will be cut by 4% (from 28% to 24%) from 6th April. It is hoped that this move might encourage more second-home owners and landlords to sell, which in turn will help to bolster the stock of available properties to buy.
Stamp Duty
While any hope of Stamp Duty relief for downsizers and first-time buyers has this week been dashed, a niche amendment was made in relation to 'Multiple Dwellings Relief', which previously benefited those buying more than one property in a single transaction. Coming into force in June 2024, this change has been met with mixed opinion, with concerns prevailing as to the potential knock-on effects on the already-stretched private rental sector.
Tax on holiday lets
Under the new budget, short-term, furnished lets will cease to be subject to tax breaks, in a move that will be applicable from April 2025. It is hoped that this decision will help to boost the stock of homes that are available for long term rent, particularly in tourist hotspots where rental markets have been widely crippled by this (now-defunct) holiday let loophole.
Summary
Given the hyperbole that abounded in the lead up to the Spring budget, the margin for disappointment was always going to be a wide one. However, those with a finger on the pulse of the industry are quick to point out that the positive effects of other policies (especially those designed to boost household incomes) have a habit of filtering through.
This should be considered against the backdrop of burgeoining market activity, and specifically, the data that predicted falls in house prices are less severe than feared.
By all accounts, the property market is proving resilient, and a steady momentum has been building in the last few months, mainly owing to the pent-up demand from last year, the impending 'seasonal bounce' and the ever-improving mortgage picture.
These key markers for industry health are helping cushion housing sentiment from the blow of a could-have-been-better budget, whilst giving motivated home-buyers and sellers the confidence they need, to action their onward moves.
For more information on the Maidenhead property market, or to request a no-obligation property valuation, please contact Braxton on 01628 674234 or email property@braxtons.co.uk.