There were big hopes for positive news for the property sector within the spring budget. However, little seems to have been done to assist would-be homebuyers and movers.
The recent spring budget, presented by Chancellor Jeremy Hunt, has drawn attention to its implications for the housing market. Amidst speculations surrounding potential alterations to stamp duty tax and the proposed launch of a 99% mortgage scheme, the budget speech did touch upon aspects relevant to the housing sector. However, these measures are anticipated to impact a relatively small segment of homebuyers and sellers.
Contrary to expectations, the budget speech did not address the topic of mortgages, despite its significance throughout 2023. While there were discussions about a 99% mortgage scheme, it seems to have been abandoned without a replacement. There is a growing recognition that more innovative solutions are needed to assist first-time buyers with limited deposits and those facing challenges in securing sufficient finance to enter the housing market.
Key announcements concerning the property market include:
- Removal of tax breaks for the furnished holiday lettings regime: Chancellor Jeremy Hunt unveiled plans to eliminate tax relief for short-term, furnished holiday lets. This is a means to bolster the availability of long-term rental properties, particularly in tourist destinations where long-term rental options are scarce. Consequently, both long and short-term lets will be treated equally for tax purposes.
- The end of multiple dwellings stamp duty relief: The multiple dwellings relief, originally intended to incentivise investment in the private rented sector, is being abolished. A review of existing legislation revealed that the relief was not being utilised as intended. As a result, the government opted to discontinue this relief scheme.
Regarding stamp duty, which often poses a significant obstacle to movers due to its hefty costs, there were no significant changes announced in the budget. Calls for the existing stamp duty threshold to be made permanent to assist those seeking to move were not addressed. Consequently, unless the government decides otherwise in the autumn, more individuals will be facing higher stamp duty rates year when the temporary thresholds expire in spring 2025.
While many industry observers had hoped for reforms benefiting first-time buyers and improvements to the outdated stamp duty system, the budget provided little relief to home buyers and movers. As such the lack of permanence in the temporary stamp duty threshold leaves uncertainty over future transactions.
If you would like further information or to discuss options, contact one of our Independent Mortgage Advisor.
