What does the Spring Budget mean for the housing market?
There was not one mention of the word Mortgage in the 98-page Spring Budget with home movers almost being left out entirely. Here we look at some of the announcements.
What does the Spring Budget mean for the housing market?
Chancellor Jeremy Hunt laid out his Spring Budget yesterday, 6th March 2024. 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.
MAB's mortgage expert, James King, 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.”
Take a look at some of the announcements:
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.
Rightmove 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.”