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Category: government and politics
Jeremy Hunt will announce the Spring Budget on 6 March 2024. After a tumultuous year for the sector, and no direct mention of landlords within the Autumn Budget last year, the property sector is eager to find out to what extent the housing market will receive support in this year’s Spring Budget. Will landlords get any support?
It would be fair to say that 2023 was a tough year for the property sector. The cost of borrowing grew due to high inflation, and house prices were volatile.
Ultimately, house prices beat expectations by closing the year with a modest 1.7 per cent rise on the year prior, according to Halifax.
Economists have called for housing to receive more support in this upcoming Spring Budget, and with the changing dynamics within the rental sector, similar calls have come from industry representatives.
Will landlords benefit from the Spring Budget?
The reality is, the Budget is unlikely to deliver any specific and significant benefits to landlords directly. As we approach a general election, every action can impact votes and it is important to curry favour with the majority.
Michael Gove recently made clear that the government favour supporting first time buyers. But, what more can be done? At present Stamp Duty is already frozen on properties up to £425,000 in value. There has been mention of another Stamp Duty holiday, but with the cost of living crisis in full flow, property would still remain out of reach for huge numbers of people.
If landlords do benefit in any way, it would likely be changes that affect everyone, such as the rumbles of income tax being cut.
Sarah Coles, head of personal finance at financial services company Hargreaves Lansdown, mentions this when commenting on the Budget:
A potential cut in the rate of income tax was widely trailed ahead of the Autumn Statement, but didn’t happen.
It’s very possible the Chancellor is keeping this up his sleeve as a late present in March.
This is an approach that previous Chancellors from Nigel Lawson to Ken Clarke have used in the run up to an election, so it wouldn’t be a big surprise.
[…] A cut in basic rate income tax – say from 20% to 19% – would put more money in people’s pockets. It would also have a knock-on impact for pension tax relief.
Expectations for the Spring Budget 2024
Many thought that housing measures that pass savings back to the general public should have been included in the Autumn Budget last year.
Brendan Sharkey, real-estate specialist at professional services company MHA, felt that there were missed opportunities:
Housebuilding and help for young people and first-time buyers were absent from the [Autumn] Statement. It’s a shame that the Chancellor didn’t announce cuts to stamp duty. This would have created demand […]
Regarding the Spring Budget 2024, Sharkey has commented:
The government will […] need to consider how to replace the mortgage guarantee scheme, which comes to an end in June 2025.
It was also disclosed earlier this week that two-thirds of the UK housebuilding fund remains unspent despite an ongoing housing crisis, primarily due to a significant rise in costs and the challenges getting approvals.
However, as we gear up for the election, housebuilding and home ownership will be a key issue.
In Sharkey’s view, one of the reasons provisions ought to be set aside for housing is because councils do have low housebuilding approval rates.
Incidentally, Housing Minister Michael Gove recently unveiling a new framework for local authorities in a bid to improve approval rates. The Spring Budget 2024 may include further funding to meet this objective.