Industry Intel

Spring Budget 2024: An analysis of Chancellor Hunt's Housing and Tax Measures

The Spring Budget of 2024 brought disappointment to those expecting initiatives to assist first-time buyers and potential tax cuts.

Chancellor Jeremy Hunt, while emphasising the priority of "building homes for young people," did not introduce the highly anticipated 99% mortgage scheme, stamp duty relief for downsizers, or a repeal of Lifetime ISA penalties for first-time buyers in London.

A focal point of attention was the Stamp Duty Land Tax, with the government deciding to abolish Multiple Dwellings Relief, a measure aiding those purchasing multiple properties in a single transaction. This move drew criticism, highlighting its potential impact on buy-to-let clients, potentially discouraging investment in the private rental sector.

The budget faced additional scrutiny for the absence of action on stamp duty thresholds. The decision to temporarily maintain the £425,000 stamp duty threshold disappointed industry leaders who perceived it as a missed opportunity to stabilise the housing market's fragile recovery.

The abolition of non-dom tax status raised apprehensions, particularly in London's prime property sector, heavily reliant on overseas investment. While some, warned of potential talent loss in financial services, others suggested that international buyers seeking second homes might not be significantly affected.

On a positive note, the budget included a reduction in the higher rate of property capital gains tax from 28% to 24%, aiming to stimulate property sales and increase availability for diverse buyers.

Regeneration schemes for Barking Riverside and Canary Wharf, along with a crackdown on short-term rentals, were highlighted. Chancellor Hunt pledged a £242 million investment to rejuvenate Barking Riverside and Canary Wharf, aiming to deliver 7,200 new homes in Barking and 350 homes in Canary Wharf. Barking Riverside, positioned as one of London's significant micro-towns, is set to accommodate a total of 10,800 homes, with 5,400 yet to be constructed. Notably, half of the residences at Barking Riverside have been designated as affordable housing. This transformative project, among Europe's largest brownfield regeneration endeavours, involves converting a disused power station into a Thameside town spanning a 2km stretch along the river.

The budget also addressed concerns about the Furnished Holiday Lettings tax regime, intending to enhance the availability of properties for long-term rentals.

Despite expectations for changes to the Lifetime ISA (LISA) cap or the introduction of a 99% mortgage scheme, these measures were not included. Chancellor Hunt expressed a desire to reform LISAs but did not provide immediate changes. The proposed 99% mortgage scheme, aimed at first-time buyers, was not implemented, and faced criticism from various quarters.

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