Spring Budget Delivers Mixed News for Property Sector

In the latest financial announcement, the Chancellor has laid out plans in the Spring Budget, touching upon various aspects from tax adjustments to housing initiatives. Key highlights include the continued freeze on fuel duty, investment in 8,000 new homes, the introduction of a British ISA, a reduction in capital gains tax, and further National Insurance cuts. Here’s how experts from the property and finance sectors are reacting.

Tax Cuts and Housing Measures

Despite the broad range of fiscal strategies, the reduction of capital gains tax from 28% to 24% stands out as a measure aimed to stimulate the property market. However, this comes alongside the removal of stamp duty relief for multiple dwellings and a crackdown on tax breaks for second home owners, particularly those renting out on a short-term basis.

Industry Voices Concern

Richard Donnell, Executive Director at Zoopla, expressed disappointment over missed opportunities to address the critical need for more homes and mortgage support. Highlighting the stagnant supply and the imperative need for planning system reform, Donnell calls for government action to facilitate home ownership, especially through the support of long-term fixed-rate mortgages.

Ben Beadle of the NRLA points out the Budget’s oversight in reviving long-term rental property investments, criticizing the lack of meaningful measures to enhance the supply of long-term rentals.

Housing and Planning Left Wanting

Jeremy Raj, National Head of Residential Property at Irwin Mitchell, remarks on the scant attention paid to housing and planning in the Budget, noting a missed chance to address downsizing, property taxes, and environmental housing improvements.

Tax Changes Under the Spotlight

Damian Thompson from The Mortgage Works and Richard Rowntree from Paragon Bank both welcome the cut in capital gains tax, foreseeing a positive impact on property transactions and market fluidity.

Relief Over 99% Mortgages

The industry breathed a sigh of relief as fears over the introduction of a 99% mortgage scheme were quelled. CEOs from Yopa, Open Property Group, and GetAgent.co.uk shared their concerns over how such a policy could exacerbate market demands without addressing supply issues, potentially leading to market instability.

Short-Term Let Taxation Adjustments

The decision to scrap tax breaks for short-term lets has sparked varied reactions. CPRE and SpareRoom endorse the move, viewing it as a step towards better housing affordability and utilisation. However, Sykes Holiday Cottages warns of negative impacts on tourism-driven economies, urging a balanced approach.

Missed Opportunities Highlighted

The Budget has been critiqued for not adequately addressing the pressing issues within the housing market, from the home selling process to incentives for tenants and landlords. Professionals like Ruth Beeton and Neil Cobbold voice concerns over the absence of significant reforms to support the property buying and selling process and the rental market.

Responses encapsulate a mix of cautious optimism and disappointment, with calls for more comprehensive strategies to tackle the UK’s housing and rental market challenges.