Today Chancellor Jeremy Hunt delivered his yearly budget announcement, including some news regarding your home - whether you’re renting, buying or selling. However, the general consensus among property experts is that the Spring budget 2024 missed several opportunities and is set to do very little for this sector.
Following the autumn statement 2023 last November, which was even more disappointing and uneventful, it was predicted and hoped that mortgages, such as the proposed 99% mortgage idea, could be a hot topic, along with a stamp duty relief for first-time buyers. But sadly, neither of those things materialised.
Instead, this is what was discussed, what our experts think of it and what it means for you.
Spring budget 2024
While stamp duty was mentioned in the Spring budget 2024 announcement, it was not in the capacity that would be particularly noteworthy to most people.
Stamp duty
Stamp duty is a charge on the value of the property being purchased and removing it would mean removing the costs that come with moving home, according to Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners.
‘Abolishing stamp duty land tax (SDLT) on property purchases would have delivered a huge boost to a congested property market by getting Britain moving again. Reducing the cost to move is a great way to incentivise first-time buyers at the bottom of the property ladder by making it more affordable for them to purchase a home. Abolishing it would also encourage more older homeowners sitting in larger homes to sell up and downsize.’ And making it a good idea to move in 2024.
But instead, Jeremy Hunt decided to address stamp duty tax only by abolishing multiple dwellings relief for stamp duty land tax, a relief that benefited those purchasing multiple properties at once.
Higher rate capital gains tax
Another point in the Spring budget delivery that affected owning and renting was reducing the higher rate capital gains tax from 28% to 24%. What does that mean?
‘Capital gains tax is a tax charged on the profit you make when you sell an asset that has increased in value,’ says Rob Houghton, founder and CEO of reallymoving. ‘It is not charged on primary residences in the UK, or in other words our homes, but it applies to second homes and investment properties, such as buy-to-let flats.’
And this could have a negative impact on the already low supply of rental homes.
‘Landlords who have been thinking about exiting the buy-to-let sector will be encouraged to go ahead, as their tax bill will be reduced. I’m concerned that the supply of rental properties is already too low, which is why there’s been such fierce competition among tenants over the last year, driving record high rents. Encouraging more landlords to sell up will increase the supply of homes for sale, but it will worsen supply in the rental market and potentially push rents up even further.’
Which is something us renters don’t want to be hearing right now, or ever.
But the biggest takeaway from this year's Spring budget is that it didn't really do much for the property market as it should have, whether that's bettering the supply of new homes or improving mortgages for first-time buyers.
'The budget marks another missed opportunity to take action on boosting supply and mortgage availability in the housing market,' says Richard Donnell, executive director at Zoopla. 'The consensus is that the country needs more new homes. There is a need for widespread reform of the planning system to encourage supply. More funding is needed for social and affordable homes, and housing infrastructure investment to unlock supply.'
'The government should also look to support the emergence of a long-term fixed rate mortgage market as a matter of urgency. This will help more young people with smaller deposits access home ownership,' Richard concludes.
Until the next budget then.
