Chancellor’s Budget Measures by Heather Hilder on March 19, 2024 Chancellor’s Budget Measures Mixed reaction to Chancellor’s Budget measures Chancellor Jeremy Hunt’s Spring Budget statement this year presented something of a mixed bag for the property market – it contained both positives and negatives. On the positive side, the Chancellor implemented the heavily predicted further cut in National Insurance, reducing the rate from 10% to 8%. This move is worth about £450 to someone earning £35,000 a year and will assist budding buyers struggling with lender affordability criteria. He also announced freezes on fuel and alcohol duty, along with a reform of child benefit. Raising the threshold of repayment from £50,000 to £60,000 took 170,000 families out of having to pay the benefit back. The threshold for full repayment is set to rise from £60,000 to £80,000 in April. This will result in a saving of around £1,300 for nearly half a million families. No widespread reform Mr Hunt also delivered better economic news in general, forecasting growth at 0.8% this year and 1.9% in 2025, according to the Office of Budget Responsibility. He mentioned that the all-important inflation rate is expected to fall below 2% in a few months. This perhaps signals a drop in interest rates which will be welcomed by mortgage holders and prospective buyers. However, hopes for a series of specific measures to assist first-time buyers (such as the proposed 99% mortgages) were dashed. Additionally, there was no widespread reform of Stamp Duty Land Tax – a measure advocated by many industry commentators. On the lettings side, both landlords and tenants will benefit from measures to ease the tax burden. Also, the promise of lower interest rates later in the year will be good news for holders of Buy-to-Let mortgages. The Chancellor also announced a reduction in Capital Gains Tax from 28% to 24%, which could encourage some landlords to release properties for sale while simultaneously putting more pressure on the supply of homes for rent. Removes the advantage However, he abolished the SDLT multiple homes relief, which is expected to particularly impact the ‘Build To Rent’ sector and may also affect some traditional landlords. Furthermore, landlords with short-term lets suffered when the Chancellor announced the abolition of the Furnished Holiday Lettings Tax regime. This removes the advantage of short-term holiday let landlords over their long-term rental counterparts from April 2025. The Chancellor expressed concern that the current regime was creating a distortion which resulted in properties not being available to local communities in areas popular with holidaymakers. These changes in tax and regulation might lead to more short-term lets transitioning into the long-term market. The changes in CGT may well result in more landlords selling up. The measures announced by the Chancellor are unlikely to impact the overall number of rental properties across the UK. While there have been changes affecting the sector, there was no specific action to increase the number of both social and privately rented properties throughout the country. Rents, which have risen dramatically in recent years, are likely to continue to rise this year. Smooth property sale Here at Callaways Estate Agents, we will do all we can to help you complete a smooth house sale. We operate across the South Coast, including in Falmer, Worthing and Brighton & Hove. We have the experience and know-how of the local area to help you set the right price and attract the best kind of buyers. For more info about what we offer, please get in touch with us today. Your free, instant online valuation of your home, to give you an idea of how much your property is worth, is waiting here.
