Rishi Sunak last week delivered a £65billion spring budget, but what has it offered the property market?
Cambridge Finance has reviewed the key elements of the budget which affect the property industry and consider their implications.
- Stamp duty holiday extended for an additional 3 months
- a welcome measure to continue the house buying surge but is this just moving the cliff edge that house sales will fall off when the holiday ends? Let us hope the chancellor will consider measures to ease the stamp duty back in to make it more of a gradual slope than a cliff edge. Can the industry cope with the surge of demand this extension will cause?!
- Business rates relief extended for another 3 months
- Some see this as a stay of execution for many for retail, hospitalities & leisure businesses that are hanging on. For the remaining 9 months of the fiscal year, business rates for some will then see a cut of two-thirds, so it will be eased back in more gently but whether this will cement the industry back together or just cover the huge cracks is a big unknown. There is no relief for landlords whose properties have stood empty because the businesses failed, so the ripple effect of failing businesses continues. If the properties remain vacant there will be empty rates to pay.
- Introduction of 95% government-backed mortgages
- This allows buyers the option to put just a 5% deposit down on a home worth up to £600K, the scheme also offers the option to fix the initial mortgage rate for at least 5 years. The scheme is available for new mortgages up to December 2022 on either new or existing properties. This product will be offered by Barclays, HSBC, Lloyds, Natwest & Santander from April.
- Will this along with the extension to the stamp duty holiday drive up prices further?
- A review of the wider business rates has been deferred until autumn so adds to the waiting list. The business rates multiplier was frozen for 2021-22 but there is a lot of frustration over the uncertainty for the future.
So it would seem it is a budget made to shore up the industry in the short term but the future is still very uncertain. The impact of all the Covid measures coming to a close and then the inevitable tax increases to cover the cost is yet to be seen and is a daunting prospect.