REACTION: Chancellor drops bombshell budget on agents and landlords

Chancellor Jeremy Hunt announced in his Budget today that the furnished holiday lets tax relief would be scrapped.

He also said Stamp Duty relief on multiple properties would be abolished, as it was being “regularly abused”.

On Capital Gains Tax on property, the Chancellor reduced the top rate from 28% to 24%, which he said would bring in more money as it will cover more transactions.

We should help people to keep as much as possible of their own money.”

In a tax-cutting Budget, he cut National Insurance from 10% to 8%, which he said would give the average worker £450 per year.

“We should help people to keep as much as possible of their own money,” he said.

There was no mention in the Budget of a 99% mortgage to help first-time buyers.

INDUSTRY REACTION

CEO of Yopa, Verona Frankish, says : “Time and time again, we’ve seen the Government opt to keep the housing market afloat by exacerbating the demand supply imbalance and there was a very real danger that they would make the same mistake today with the launch of the 99% mortgage.

“Thankfully, this ill-advised initiative hasn’t come to fruition as it would have dangerously overheated the property market, pushing house prices beyond the record highs seen in recent months and further out of reach for the average buyer.”

Richard Donnell, Executive Director at Zoopla, adds: “The budget marks another missed opportunity to take action on boosting supply and mortgage availability in the housing market.

“The consensus is that the country needs more new homes. Supply has increased, but this has stalled.

“There is a need for widespread reform of the planning system to encourage supply. More funding is needed for social and affordable homes, and housing infrastructure investment to unlock supply,” he says.

“Another missed opportunity is the decision not to make the £625,000 threshold for first-time buyer relief permanent. This means 30% more first-time buyers will be liable to pay full Stamp Duty from March next year.”

Marc Vlessing, Founder and Chief Executive at first-time buyer house developer Pocket Living, says: “The rapidly emerging consensus is that we need to deliver 500,000 new homes per year, yet we can barely manage 200,000 at present.

“This was a real chance, perhaps the Chancellor’s last, to unlock 1.6m homes on brownfield sites through a fairer and faster planning system, support SMEs to rapidly increase housing delivery, introduce real measures to get those waiting hundreds of thousands of people onto the housing ladder, or use housing as a means to drive significant productivity gains to support key industrial and business sectors.”

Richard Davies, Director of UK Operations at Chestertons, says: “Stamp Duty is a major financial burden on buyers that has seriously restricted the freedom with which people can trade up and down to fit their personal circumstances.

“To make it more economically viable for people to move home as and when their circumstances require, we would have liked to have seen the Chancellor make an adjustment to the current Stamp Duty thresholds or at least introduce an exemption for downsizers and first-time buyers, which could have boosted the number of larger family homes that are being put up for sale and helped more people get onto the property ladder.”

Nicky Stevenson, Managing Director at Fine & Country, says: “Reducing the higher rate of Capital Gains Tax should inject some extra energy into the housing market by increasing the number of properties for sale.

“Teetering landlords unsure about whether to take the plunge and sell their property will be encouraged by this announcement,” she says.

“This should offer hope for first-time buyers who are the foundation of the property market, but have been hit particularly hard by high interest rates.”

Sam Mitchell, CEO of Purplebricks, says: “The failure to permanently act on Stamp Duty is a missed opportunity for the government to stabilise the fragile recovery that we’ve seen in the housing market so far in 2024.

“Jeremy Hunt should’ve acted now or not at all. Rumours will continue to build of cuts or increased stamp duty holidays, as they did following the Autumn Statement, which could wrongly and unnecessarily delay buying and selling decisions.

“The lack of a concrete decision leaves the market at a standstill, which is particularly damaging for first-time buyers looking to enter the market.”

Timothy Douglas, Head of Policy and Campaigns at Propertymark, adds:  “It is pleasing to see property taxation under the spotlight in the Spring Budget and the introduction of measures to level the playing field and support more homes for people to rent.

“However, overall, the Spring Budget stops short in addressing the key issue of lack of supply in the private rented sector which is higher rates of Stamp Duty when purchasing a buy to let property.

“Furthermore, whilst additional funding is welcome for housebuilding, the Chancellor has missed the opportunity to bring in Stamp Duty reliefs and wider reforms to support more people to buy and sell their dream home which comes with a guaranteed boost to the economy.”

Anyone planning to get on the property ladder would have shrugged their shoulders following this Budget.”

Tom Bill, Head of UK Residential Research at Knight Frank, said: “Anyone planning to get on the property ladder would have shrugged their shoulders following this Budget.

“Demand-side incentives for first-time buyers such as stamp duty breaks or help for those with smaller deposits would have been welcome, particularly as mortgage rates and house prices are creeping back up.”

Iain McKenzie, CEO of The Guild of Property Professionals, said: “One of the biggest obstacles to owning a property over the past few years is a shortage of good quality housing.

“A reduction in rates for capital gains tax could encourage more landlords that have been considering selling up to put their property on the market,” he says.

“So long as landlords are willing to market their property at fair prices, we could see more people looking to get their foot on the ladder.”

Sam Reynolds, CEO of Zero Deposit, said: “It’s disappointing to see the Government implementing further measures to reduce the financial profitability of many landlords with both a clamp down on short-lets and multiple dwellings relief.

“There’s no denying that the increasing prevalence of short-term lets can have a detrimental impact on local housing markets, but the irony is that this problem has been made substantially worse due to the Government war waged against private landlords in recent years.

“However, the rabbit out of the hat, albeit a small one, was a capital gains tax reduction. While it could be argued that this might tempt even more landlords to now exit the sector, it should, at the same time, make buy-to-let investment more attractive and encourage more landlords to invest.”

Disappointing to see the UK property market receive the Budget cold shoulder yet again.”

Ed Phillips, CEO of Lomond, said: “Disappointing to see the UK property market receive the Budget cold shoulder yet again following what was a lacklustre Autumn Statement.

“However, the property market has weathered a tough few months and has held firm despite many predictions of an impending collapse,” he says.

“We’ve also seen early signs that buyers are returning despite interest rates remaining at their highest since 2008 and this has also caused house prices to start to creep up.”

 

Colby Short, Co-founder and CEO of GetAgent.co.uk, said: “The Government has dodged a bullet by pulling their ambitions for a 99% mortgage at the eleventh hour and the property market will be better off from it in the long-run.

“Artificially inflating the market via gung ho, demand led initiatives, without addressing the issue of supply, is a dangerous game to play and one that can ultimately cause the market to collapse.”

Marc von Grundherr, Director of Benham and Reeves, said: “Yet another disappointing Budget for the UK property market and it’s now abundantly clear that the Government is as worried about the housing crisis as they are an alien invasion from Mars, having chosen to ignore the property sector for two Budgets on the trot.

“In fact, it’s fair to say we’ve got more chance of strangers from Mars solving the current issue of housing supply than those currently tasked with the job.”

Ruth Beeton, Co-Founder of Home Sale Pack, said: “The housing market is broken and the archaic home selling process is largely to blame, not a lack of appetite for homeownership.

“So it’s simply mind boggling that the Government remains intent on ignoring the issues at hand that result in many facing long transaction times, the high possibility of a fall through and the costs incurred when a transaction does collapse,” she says.

“In this respect, today’s Budget was a huge missed opportunity to help improve the property buying and selling process and we would have liked to see a greater focus on making the upfront information required to sell a home a necessity, not an afterthought.”

What we got was a deafening silence.”

Ben Beadle, CEO at the NRLA (National Residential Landlords Association), said: “The Chancellor has once again ignored calls to revitalise long-term investment in quality rented homes in favour of tinkering at the margins for short-term gain.

“Increasing taxes on holiday lets and cuts to Capital Gains Tax will make no meaningful difference to the supply of long-term rental properties. Meanwhile, those reliant on housing benefits still do not know if their benefits will be frozen from next year or not,” he says.

“With an average of 11 tenants chasing every home for private rent, social housing waiting lists at 1.3 million, almost 110,000 households in temporary accommodation and the number of first-time buyers slumping, the Budget needed to tackle the housing crisis once and for all. What we got was a deafening silence.

“This was a missed opportunity to make providing new homes to rent and buy the priority it desperately needs to be.”

Steve Richmond, General Manager UK&I at Reapit said, “The surprise takeaway from the Budget was the drop in the higher rate of capital gains tax on residential property from 28% to 24%. This may (as the Chancellor claims) result in more transactions, but I’m wary that this simply means shifting supply from an already heated lettings market to the sales side, leading to an increase in rents amidst reduced supply in the sector as disillusioned landlords take advantage of this opportunity to sell-up.

“The market certainly needs an improved planning scheme to promote healthy growth and supply in the housing sector while avoiding an ignition in house prices beyond what people can afford, but doing so would just be kicking the debt can down the road.”