The Chancellor has unveiled the Spring Budget, introducing several measures including a fuel duty freeze, funding for new homes in Barking Riverside and Canary Wharf, the introduction of a British ISA, a cut in capital gains tax, and additional reductions in National Insurance.
Capital Gains Tax Cut: A Notable Change
The Chancellor announced a reduction in capital gains tax from 28% to 24%, aiming to boost property transactions. However, he also revealed the end of stamp duty relief for buyers of multiple dwellings and the scrapping of tax breaks for second home owners focusing on short-term lets.
Industry Voices Concerns
Richard Donnell of Zoopla expressed disappointment, calling it a missed chance to address housing supply and mortgage availability. Highlighting the urgent need for planning system reform and long-term fixed rate mortgage market support, Donnell lamented the government’s overlooked opportunity to permanently raise the first-time buyer stamp duty threshold.
Ben Beadle of the NRLA criticised the budget for overlooking the need for investment in quality rental homes, pointing out that the changes to taxes on holiday lets and capital gains tax would do little to alleviate the housing crisis.
A Sigh of Relief Over Absence of 99% Mortgages
Industry leaders expressed relief at the government’s decision to steer clear of introducing 99% mortgages, which many feared would overheat the property market. Verona Frankish of Yopa, Jason Harris-Cohen of Open Property Group, and Colby Short of GetAgent.co.uk all praised the decision for preventing potential market instability.
Mixed Views on Short Term Lets
The government’s plan to scrap tax breaks for short-term lets drew varied responses. While some praised the move as a step towards addressing housing affordability, others, like Ben Edgar-Spier of Sykes Holiday Cottages, argued it unfairly targeted holiday let owners and could hurt local economies.
Calls for Comprehensive Planning and Innovation
Experts like Jeremy Raj of Irwin Mitchell and Damian Thompson of The Mortgage Works called for more innovative and comprehensive approaches to address the housing and rental markets’ challenges. They emphasized the need for long-term strategies to improve housing affordability and environmental standards.
Responses to Tax Changes
Sam Reynolds of Zero Deposit and Oli Sherlock of Goodlord commented on the capital gains tax reduction, seeing it as a potential boost for the property market but also a move that might encourage landlords to exit the sector. Lauren Hughes of Vouch noted the mixed implications for landlords and agents, urging the government to follow through on its house-building promises.
The Sector’s Missed Opportunity
Neil Cobbold of PayProp pointed out the budget’s lack of specific incentives for tenants and landlords, suggesting the changes might not significantly impact investment in the private rented sector or offer much-needed relief to those affected by housing costs.
In summary, the Spring Budget has elicited a range of reactions from the property and finance sectors, with many viewing it as a missed opportunity to address the underlying issues facing the UK housing market.
