As it approached many felt the Chancellor would be kind to those looking to buy property but now it has been announced, has the Spring Budget 2024 been kind to property owners?
Many expected the Spring Budget 2024 would include measures to help first-time buyers get onto the property ladder. There were suggestions this could mean the launch of a 99% mortgage scheme so that buyers would only have to put down a 1%. Others predicted 30-year fixed-term mortgages or the reintroduction of the ‘Help to Buy’ scheme.
However, different factions from across the property industry called loudest for the current reduced Stamp Duty thresholds (currently set to return to pre-Pandemic levels on 31st March 2025) to be extended or even to scrap Stamp Duty altogether to reinvigorate a stuttering domestic residential property market.
Some critics saw the potential of including home buyer-friendly elements within the Spring Budget as a transparent move to try and hold onto the younger end of the electorate, many of whom are reported to be deserting the Conservative party and need to be encouraged back into the fold.
The first thing to note is there was no mention of an extension to the current Stamp Duty regime, preferential mortgages or ‘Help to Buy’ schemes. This will doubtless come as an unwelcome surprise for the many of the people waiting to see what the budget held before progressing property purchases.
In terms of what the budget did hold for property buyers and owners, the main point relates to Capital Gains Tax (CGT). The government will reduce the higher rate of property CGT from 28% to 24%.
While Mr Hunt didn’t announce the anticipated extension of the reduced rate of Stamp Duty, the budget does include the scrapping of multiple dwellings relief for those buying multiple properties in the same or linked transactions.
Labour will almost certainly make political capital from these two budget lines as they appear to only favour the wealthy and do not offer the help first time buyers and buyers at the lower end of the market so desperately need.
The budget also promised to scrap the furnished holiday lets regime. This initiative affords tax relief to landlords on properties being rented out to holidaymakers. This makes short term rentals more profitable than long term rents at a time when the demand for rental properties far outweighs the available stock.
While this may look like a minor change, it is expected to raise another £300m a year for the Treasury and put more rental properties back onto the market. It could also be viewed as a popularist move given the bad feeling many locals feel towards the rise of the ‘Airbnb economy’ in so many of the UK’s tourist areas.
Although this perhaps isn’t the budget we as property professionals were hoping for, we remain committed to playing our part in making buying and selling your home as quick and easy as possible. If you’d like to discuss a potential sale or purchase, please contact us today.