A first Budget is always a key opportunity to set out the tone of a Chancellorship \u2013 and Rishi Sunak has certainly done that with Wednesday\u2019s announcement, pledging the dawn of a new era and a move away from the last decade\u2019s economic orthodoxy.<\/p>\n
<\/p>\n
Described as \u2018a Budget of a government that gets things done\u2019, Sunak has pledged to do \u2018whatever it takes\u2019 to see the country through the current period of economic uncertainty, created by the rapid spread of COVID-19.<\/p>\n
From tax changes to rate discounts and support for businesses in the wake of the current pandemic, the spring Budget covered a broad range of topics. But what does this mean for the property market and UK property investors specifically? Our brokers have asked and answered five key questions relating to the Budget and the property market.<\/p>\n
1.<\/strong>\u00a0What did the Budget say about housing? <\/strong><\/p>\n Understandably, given the current circumstances, Sunak\u2019s first Budget had a strong emphasis on mitigating the impact of coronavirus on the British economy. Relatively little was said about housing and the property market, while Sajid Javid\u2019s planned \u2018mansion tax\u2019 was nowhere to be seen.<\/p>\n However, Sunak did take the opportunity to announce a new \u00a312 billion multi-year extension of the Affordable Homes Programme (AHP), as well as more money for the Housing Infrastructure Fund, a government capital grant programme \u2013 which may be of interest to developers.<\/p>\n 2.<\/strong>\u00a0Will there be any changes to stamp duty?<\/strong><\/p>\n In short, yes \u2013 but not in the way many were hoping for. Some expected the Chancellor to announce cuts to stamp duty land tax (SDLT), which has played a prohibitive role in the UK\u2019s property market, particularly at the higher end of the spectrum. However, nothing was said about this, although some still believe this issue will be tackled in the Autumn Budget.<\/p>\n The actual change announced was a 2% SDLT surcharge for overseas buyers \u2013 a shift that is likely to affect many Articus Finance clients.<\/p>\n 3.<\/strong>\u00a0When will the surcharge for overseas buyers kick in?<\/strong><\/p>\n As of the 1st April 2021, there\u2019ll be a 2% surcharge for non-UK residents purchasing residential property in England and Northern Ireland. Transitional rules may apply where contracts are exchanged before 11th March 2020 but complete after the new date, so this is one for overseas investors to watch closely.<\/p>\n As for the impact of this, it\u2019s hard to say at present \u2013 especially given the current economic climate. There\u2019s actually been plenty of activity in the market of late, and this Budget announcement may accelerate a short-term \u2018London boom\u2019, as foreign investors race to complete ahead of the deadline.<\/p>\n This also might affect prices further down the line. Some foreign investors may even find themselves in a better position to negotiate a deal, as higher stamp duty costs could tamper down the market.<\/p>\n 4.<\/strong>\u00a0How will changes to capital gains tax (CGT) affect landlords?<\/strong><\/p>\n CGT rate relief was covered briefly in the Budget, with changes for properties that have not been occupied throughout the period of ownership. The final period of exemption (relevant for those who have sold properties they have not always lived in) will be reduced from 18 months to nine months.<\/p>\n Lettings relief will also be reformed, so it only applies when the owner of the property is in shared occupancy with a tenant \u2013 and not when the property was a former main residence at some point. However, little else was announced regarding landlords.<\/p>\n 5.<\/strong>\u00a0Putting aside the Budget \u2013 how will interest rate cuts affect mortgage applicants?<\/strong><\/p>\n Aside from the Budget, Wednesday also saw the Bank of England (BoE) announce an emergency interest rate cut, putting borrowing costs back down to historic lows of 0.25%. This will immediately reduce the mortgage bills of those on tracker rates, and may trickle down for current product rates \u2013 although granted, mortgage rates in general are very low at the moment, with plenty of fantastic deals to be negotiated.<\/p>\n Look to the future<\/strong><\/p>\n Ultimately, the Chancellor delivered his first Budget in extremely unusual circumstances; the package announced on Wednesday 11th March was likely not what Sunak had planned to share even one month ago, before the widespread outbreak of coronavirus.<\/p>\n In that regard, the Autumn budget will be a more telling picture of what\u2019s to come \u2013 but in the meantime, should you have any questions about the current property market or the best mortgage deals for high net worth individuals, our brokers are always happy to assist.<\/p>\n","protected":false},"excerpt":{"rendered":" A first Budget is always a key opportunity to set out the tone of a Chancellorship \u2013 and Rishi Sunak has certainly done that with Wednesday\u2019s announcement, pledging the dawn of a new era and a move away from the last decade\u2019s economic orthodoxy.<\/p>\n","protected":false},"author":1,"featured_media":14402,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","footnotes":""},"categories":[64],"tags":[],"class_list":["post-14401","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog"],"acf":[],"jetpack_featured_media_url":"https:\/\/backup.articusfinance.com\/wp-content\/uploads\/2023\/01\/16_Hazeldine_20190813_MH15636_Screen-2-scaled.jpg","_links":{"self":[{"href":"https:\/\/backup.articusfinance.com\/sg\/wp-json\/wp\/v2\/posts\/14401","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/backup.articusfinance.com\/sg\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/backup.articusfinance.com\/sg\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/backup.articusfinance.com\/sg\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/backup.articusfinance.com\/sg\/wp-json\/wp\/v2\/comments?post=14401"}],"version-history":[{"count":1,"href":"https:\/\/backup.articusfinance.com\/sg\/wp-json\/wp\/v2\/posts\/14401\/revisions"}],"predecessor-version":[{"id":21242,"href":"https:\/\/backup.articusfinance.com\/sg\/wp-json\/wp\/v2\/posts\/14401\/revisions\/21242"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/backup.articusfinance.com\/sg\/wp-json\/wp\/v2\/media\/14402"}],"wp:attachment":[{"href":"https:\/\/backup.articusfinance.com\/sg\/wp-json\/wp\/v2\/media?parent=14401"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/backup.articusfinance.com\/sg\/wp-json\/wp\/v2\/categories?post=14401"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/backup.articusfinance.com\/sg\/wp-json\/wp\/v2\/tags?post=14401"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}