Spring Budget 2024: A mixed bag, but mostly a missed opportunity
As often happens with government Budgets, it’s what was NOT announced that is as interesting and disappointing. So, what was actually said by the Chancellor on the Spring Budget 2024?
The Spring Budget and first time buyers
In my view, it’s undeniably a missed opportunity that the Spring Budget included no measure directly aimed at making it easier for first-time buyers to get on the ladder. And very little to get house-building volumes up in a bid to solve the housing shortage. And only a limited measure to bolster the private rental sector and stop landlords selling up.
There were hints before the speech that there would be mortgage help for younger buyers faced with the obstacles of saving for deposits while still paying high rents. Alas, there was nothing to help this important part of the population.
The consumer takeaway
Likewise, many parts of the property industry were hoping for incentives for landlords to stay involved and not sell up. Public sympathy for landlords may be pretty small, but in the absence of large-scale new house building to accommodate the UK’s growing population, landlords still play an important part. But they have little to smile about from the Spring Budget.
So, the consumer takeaway from the Budget is simple – there’s no change likely to the housing market in the immediate future, so there’s little point in delaying plans further.
Indeed, there’s every reason to ‘get on with it’ before a General Election is called and the market slows for a few months.
Yet there were some housing measures in the Spring Budget, so for the record let’s look at them.
Tax breaks for owners of furnished holiday homes
The much-rumoured ending of tax breaks for owners of furnished holiday homes who let them out to holidaymakers was confirmed.
Cynically this may be seen as a money-making exercise for the Treasury, but it may well be the incentive needed to persuade owners to let these properties out for long-term tenants. And there is no shortage of demand for them right now. So that’s a ‘plus’ for this Spring Budget.
Capital Gains Tax
There’s also a cut in Capital Gains Tax on property from 28 per cent to 24 per cent. Ironically this may lead to more landlords selling up, as they will pay less tax on their profits. Nonetheless, this encourages some movement in the property market, which tends to be a good thing.
There’s also a very specific pledge to invest £242m in two high-profile parts of London. Barking Riverside and Canary Wharf, where 8,000 homes will be created. While the greater Canary Wharf area will be transformed into a centre attracting life sciences.
The Budget on a broader front
On the broader front, it has to be remembered that this was almost certainly the last Budget before a General Election and so there were some feel-good measures.
These are important to note because, even though they aren’t directly relevant to the housing market, they create confidence in the economy. The more confident people feel, the more they’re likely to buy, sell, move, decorate and do other activities benefitting us all.
I’ve listed the other key measures here.
- Inflation to hit two per cent over summer;
- 2p off National Insurance from April;
- increasing VAT registration threshold from £85,000 to £90,000;
- a series of levelling-up measures include £100m for areas including High Peak, Dundee, Conwy, Erewash, Redditch and Coventry to support “cultural projects”;
- Scotland to get extra £300m, Wales £170m and Northern Ireland £100m under the Barnett devolved funding formula;
- £6bn more for the NHS, including £2.5bn this year;
- £105m over the next four years to build 50 new special free schools;
- £75m for ‘hotspot policing’;
- a freeze on fuel duty for another 12 months;
- a six-month extension to the Household Support Fund;
- a freeze in alcohol duty;
- new tax on vapes and one-off rise in tobacco duty;
- energy profits levy to be extended until 2029;
- new British Savings Bond with a guaranteed rate, fixed for three years;
- a new British ISA, allowing additional £5,000 investments in UK equity to be made each year;
- extra £45m for medical charities, including £3m for Cancer Research UK.
While the Spring Budget 2024 may have missed some opportunities to directly support the housing market, it still offers some positives. To stay informed and make confident housing decisions, subscribing to the Move iQ newsletter is a wise move for comprehensive insights and updates on the housing market.
Last Updated: September 22nd, 2024
