Date posted: 07/03/2024

Category: Uncategorised

Author: KM

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What does the Spring Budget mean for the housing market?

Chancellor Jeremy Hunt today laid out his Spring Budget. This comes after weeks of rumours around potential changes to stamp duty tax, and the possible launch of a 99% mortgage scheme.

However, while the speech made some announcements related to the housing market, they are measures that are likely to be relevant to only a small number of home-buyers and sellers.

Rightmove provided a helpful summary for what this all means for the housing market. This is what they said:

“Our mortgage expert, Matt Smith, said: “Despite mortgages being one of the defining topics of 2023, there is not one mention of the word in the 98-page Spring Budget. Whilst a 99% mortgage scheme was reportedly considered, it appears to have been scrapped and then no replacement found. More innovation is needed to help first-time buyers with smaller deposits, and those who are struggling to borrow enough to get onto the ladder.”

  • Removal of tax breaks for furnished holiday lettings regime

There are currently rules in place offering tax breaks for short-term, furnished holiday lets. Today, Jeremy Hunt announced that in an attempt to boost the number of homes available for long-term rent – particularly in tourist hotspots, where homes available to rent long term are scarce – the tax relief for short-term lets will be removed. Long and short-term lets will now be treated the same for tax purposes.

However, this legislation isn’t due to come into place until April 2025.

  • End of multiple dwellings stamp duty relief

Multiple dwellings relief was designed to support investment in the private rented sector. It was hoped that needing to pay less stamp duty would lead to landlords investing in more homes, which they could then rent out to tenants long term. However, after a review into the existing legislation found that the relief isn’t being used in this way, the government have decided to abolish this relief.

  • Were there any other changes to stamp duty?

The cost of stamp duty can pose a big barrier to movers, with often hefty stamp duty tax in addition to other moving costs. There had been calls for the existing stamp duty thresholds – which are set to expire in Spring 2025 – to be made permanent, in order to help those looking to move. But no such announcement was made in Jeremy Hunt’s speech today.

Our property expert, Tim Bannister, says: “We had hoped the government would seize the opportunity to help first-time buyers and reform the outdated stamp duty system today. Instead, home-movers were left with extremely little, and the temporary stamp duty thresholds weren’t even made permanent, meaning more will pay higher rates of stamp duty next year, unless the government makes them permanent in the Autumn.”

 

Modified article taken in part from an article from:   Rightmove

If you liked this article, you may enjoy this one:  Will lower inflation boost the property market in 2024?

 

Important Information
All property sales and the financial advice that surrounds them are as unique as the people engaging in the transaction. It is important to not decide without seeking professional advice. If you want to sell your home and are considering redecorating before marketing, speak to one of our Property Professionals to get the best advice for presenting your home for sale before making any investment. This article is for the purpose of information only and should not be seen as financial advice.

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