Featuring insights from: Black Brick, Chestertons, Fine & Country, Harrods Estates, Heaton & Partners, Jackson-Stops, Janine Stone, Knight Frank, Lomond, London Central Portfolio, Propertymark, Robert Irving Burns, Savills, SPF Private Clients, Winkworth, Zoopla and more
By PrimeResi
The property industry seems underwhelmed by this year’s Spring Budget. Chancellor Jeremy Hunt set out a suite of tax tweaks and spending pledges, but stopped short of pulling any blockbuster moves.
Jackson-Stops boss Nick Leeming suggests Hunt took “a rabbit in headlights approach”, rather than the traditional rabbit-from-a-hat trick that Chancellors are won’t to perform on Budget day. Knight Frank’s research chief Tom Bill talks of “shrugged shoulders”; Zoopla, Propertymark and SPF Private Clients agree it was a “missed opportunity”, while “disappointment” in some form crops up in a large proportion of the comments below. More robustly, property consultancy Bidwells says “the absence of measures to address the national housing emergency is astonishing.”
Announcements that did garner some excitement include a widely-anticipated change to Non Dom status (replacing it with a four-year tax break on any overseas income), a reduction in Capital Gains Tax on residential property (which has been roundly welcomed by the sector), and the removal of tax breaks for holiday rentals and for portfolio acquisitions.
There’s widespread chagrin – but not surprise – that Stamp Duty was not changed in a meaningful way, while many lament a general lack of support for and innovation on housebuilding.
Talking Heads: Prime property industry reactions to Jeremy Hunt’s 2024 Budget statement
‘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
“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. We may discover later this year if the government intends to offer more support to buyers, whose mobility around the UK is vital for an economy that is firing back up after Covid.”
‘The abolition of multiple dwellings relief is likely to temper investment among landlords’ –
Lucian Cook, head of residential research at Savills
“Today’s budget has bigger implications for private landlords and second homeowners than current and aspiring homeowners. The abolition of multiple dwellings relief is likely to temper investment among landlords, while the targeted cut in capital gains tax on residential properties may tip the balance for a few landlords who have questioned their ongoing investment in the sector.
“That won’t do much for rental supply, in combination with changes in rental regulation. But neither will it necessarily make it substantially easier for people to get on the housing ladder.
“Without any specific measures to help first-time buyers, it may well accelerate the restructuring of the buy-to-let sector to bigger, less mortgage-dependent landlords, as much as opening up stock to those looking to get a foot on the housing ladder.”
‘The reduction in CGT is helpful and a step in the right direction to get the market moving’ –
Camilla Dell, Founder and Managing Partner at Black Brick
“The reduction in CGT is helpful and a step in the right direction to get the market moving. Many property owners have seen significant gains on their property investments/second homes (bear in mind there is no CGT when selling your primary residence). So, the benefit will be restricted to sellers who have made gains on properties such as investments, second homes/holiday homes. I’m not sure the change really addresses the bigger issue; namely people downsizing and weighing up the costs of moving, with stamp duty being the biggest deterrent. Someone downsizing from their primary home will see no benefit from this change. So, I think the effects will be limited and mainly benefit investors and foreign owners of property.
“The abolishment of SDLT relief on multiple dwellings is also shortsighted. Many of our buy to let clients purchase 6 or more properties and benefit from lower rates of SDLT as a result. They are providing much needed rental supply into the market and without this tax break it is yet another deterrent towards investment into the private rental sector. Not good news for tenants as fewer Landlords results in higher rents.”
‘Is there going to be a flurry of sales from landlords because they will make a saving on capital gains tax? No.’ –
Mark Harris, chief executive of mortgage broker SPF Private Clients
“More stimulus for the housing market is desperately needed to boost transactions and social mobility, so this Budget was a missed opportunity. While there has been some recovery in the housing market since the start of the year, it is still quite subdued and getting on the housing ladder is so difficult, particularly in higher-value areas such as London and the southeast, unless you have access to a significant deposit.
“Is there going to be a flurry of sales from landlords because they will make a saving on capital gains tax? No, they are in it for long-term gain, capital appreciation combined with income yield. Of course, that yield has been hit hard with higher interest rates and more regulation, as well as the inability to offset mortgage interest but professional landlords are committed and not going to start selling because of a slight reduction in CGT. Perhaps with rents so high the last thing we need is a reduction in homes to rent anyway?
“The abolition of the furnished holiday lettings regime was expected – it levels the playing field with other landlords and is better for local communities.
“The cut in National Insurance could benefit mortgage borrowers. Someone earning £30,000 a year would see a net gain of £610 per annum; if they used that money to overpay their mortgage by £50 per month, the mortgage would be paid off nearly three years early, saving more than £10,000 in interest [based on a £130,000 mortgage over 25 years at a rate of 4.5 per cent paid back two years and nine months early, saving £10,980 in interest].”
‘Another missed opportunity’ –
Richard Donnell, Executive Director at Zoopla
“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.
“The Government should also look to support the emergence of a long-term fixed rate mortgage market as a matter of urgency. This will help more young people with smaller deposits access home ownership – particularly in southern England where deposit size is the biggest barrier to getting on the housing ladder.”
“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.”
‘We would have liked to have seen the Chancellor make adjustments to stamp duty’ –
Richard Davies, Director of UK Operations at Chestertons
“For the past two decades, the government has declined to align the Inheritance Tax threshold with rising property values, which has made it a highly outdated levy. Despite speculations that the Chancellor might announce raising the IHT threshold, it is a tax that only affects 4% of the population so was probably considered too much of a gamble ahead of the general election.
“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.
“Despite mortgage rates coming down a bit from their highs last year, rates are creeping up again and first-time buyers need all the help they can get. The Chancellor’s decision to not extend the SDLT relief for first-time buyers is disappointing news. Whilst this could lead to more first-time buyers rushing to buy a property before the relief ends in 2025, it will eventually make it that much harder for future first-time buyers to get on the property ladder.”
‘There was a certain inevitability about the abolition of multiple dwellings relief’ –
Edward Heaton, founder of buying agency Heaton & Partners
“There was a certain inevitability about the abolition of multiple dwellings relief which will certainly come as a disappointment to many buyers of high value homes. Whilst disappointing, being pragmatic it is also not unfair.
“The reduction in capital gains tax upon the sale of property is certainly to be welcomed and is likely to release more stock to the market in the coming months and years.”
‘A rabbit in headlights approach on housing with major changes to property taxation avoided’ –
Nick Leeming, Chairman of Jackson-Stops
“As Conservative support hits its lowest level for more than 40 years according to Ipsos polling, and with property transaction volumes at an 11 year low, many of us were rightly hopeful of a clear priority plan on property from the Chancellor today. Yet with nothing to lose, and a statement of over an hour, it seems Hunt has gone for a rabbit in headlights approach on housing with major changes to property taxation avoided. For many voters ready to hit the polls in a matter of months, the decision to not address supply issues that have been slowing down homeownership for huge swathes of the country for a number of years, could be a defining moment for the current government. If the property market is looking for a small win to be taken from today, the cut to property capital gains tax from 28% to 24% should, to some extent, increase the number of transactions particularly within the prime market.”
‘This Budget should improve demand although we are not sure that the Chancellor has done enough to encourage an increase in the supply of affordable homes’ –
Jeremy Leaf, north London estate agent and a former RICS residential chairman
“Overall, this Budget should improve demand although we are not sure that the Chancellor has done enough to encourage an increase in the supply of affordable homes in particular, which is so badly needed.
“Whether changes in holiday letting arrangements and the reduction in Capital Gains Tax will prove beneficial remain to be seen.
“The government’s widely forecast cut in national insurance contributions and early realisation of its aim for lower inflation should mean mortgage costs can fall more rapidly and buyer confidence improve, which will certainly benefit the housing market.
“The reduction in CGT could encourage even more buy-to-let investors who were thinking of selling up to leave the market in case a Labour Government increases CGT again in the future. This could further reduce the availability of rental property and push up rents, making it more difficult for tenants and young people in particular.”
‘Disappointing that inheritance tax wasn’t a topic’ –
Liam Monaghan, of buying and investment agency London Central Portfolio
“Holiday-let tax breaks: Aligning the market for owners who benefit from holiday-let tax breaks will act as a positive for the long-let market, as currently, tenants are effectively losing out on homes to tourists. It is currently more tax efficient for an owner to rent out their properties on short-let platforms such as Airbnb. In areas with a high level of tourism, like London, it has meant that more properties have been made available for these types of lets and therefore removing them from the general long-let market. The proposed changed should encourage these investors to return to the long-let market, therefore increasing the supply which is desperately needed. There is clearly a huge demand for long let rental properties from tenants, as rents are rising well in advance of inflation. Tenants are also offering landlords rents a year in advance in order to secure a property over somebody else.
“Abolishing multiple dwelling relief: By removing multiple dwelling relief, buyers will purely pass on increased tax to the sellers, whether it is a new developer or a home vendor.
“Non Dom and CGT: We need to stimulate the market in terms of transactions and we hope the abolishment of the Capital Gains Tax and Non-Dom will hopefully encourage this much-needed movement. International buyers coming to London and buying a second/holiday home are likely to have a strong presence around the other key global cities and may not be adversely affected by this.
“Disappointments: Although we realistically did not expect there to be any changes to SDLT for downsizers, it is something the industry needs. Whether a reduction or freeze, this would have been a great initiative to free up much needed stock at the top end of the market, which would lead to a healthy trickledown effect within the market. Especially as there has been numerous press attention highlighting how high stamp duty costs is one of the main reasons stopping them from moving. It is not just a demand problem, it is a supply issue too. Downsizers are sitting on a number of much-needed family homes. The Government could have made a real difference here, so it’s such a shame that they haven’t.
“It’s also disappointing that inheritance tax wasn’t a topic. It was something we were hoping for in the Autumn Statement and again for the Spring Budget. This would not only have been a wise and popular move for the Conservatives this close to a general election, but it would have helped the UK be more competitive on a global platform for overseas investment, helping to boost the general UK economy. It would also help build momentum in transaction volumes and price growth for the domestic market.”
‘Hunt’s decision to scrap the non-dom tax regime threatens to snuff out Prime Central London’s recovery’ –
Gideon Stone, co-founder of interior design agency Janine Stone & Co
“The UK prime and super-prime residential sector is one of the few points of light amid a very difficult housing market. The sector has a strong appeal, seeing a more than 5% increase in listings over the past 12 months, with particularly pronounced growth in prime London neighbourhoods, such as Highgate, Holland Park, and Belgravia. Overall, the sector’s economic contribution is significant, generating over £36 billion across some 16,000 transactions last year.
“Overseas buyers are vital to this market, accounting for 45% of purchases in Prime Central London in 2023, an increase of 6% on the previous year. As a result, Chancellor Hunt’s decision to scrap the non-dom tax regime threatens to snuff out the sector’s recovery. Too sudden or too dramatic a change in the tax system for high net wealth individuals risks transactions to grind to a halt, depriving the Exchequer of much needed revenues and the housing market of an upturn in one of its most important sectors.
“Britain is blessed with a large endowment of extremely desirable luxury properties that overseas buyers wish to purchase and the Government should think carefully before jeopardizing the future of this important sector.”
‘Non-domiciled UK residents face decisions about what to do’ –
Antony Antoniou, CEO of Robert Irving Burns (RIB)
“Non-domiciled UK residents face decisions about what to do now that the non-domiciled tax status is set to end in April 2025. What those nearly 70,000 non-doms decide could have wide repercussions for the UK’s tax revenue and international competitiveness.
“It is not only super-rich business owners and heirs that benefit from the status, non-doms also include City of London bankers, lawyers and consultants. Those living off unearned income are far outnumbered by non-doms who work.”
‘Disappointing that the Chancellor didn’t choose to raise SDLT thresholds’ –
Geoff Wilford, Founder of Wilfords
“It’s disappointing that the Chancellor didn’t choose to raise SDLT thresholds at a time when buyer’s general finances are stretched and mortgage rates remain high. Stamp Duty represents a considerable lump of money for many and any help would have been welcomed as it would motivate people to move.
“For downsizers, an increase to thresholds would have been particularly welcomed as Stamp Duty disincentivises this group of buyers from moving because of the cost, which in turn means many family homes are being under-occupied. Cutting the tax would make more people want to relocate to a smaller home, freeing up vital family housing stock for those looking to upsize.”
‘Will not ultimately make much of an impact at the upper-end of the property market’
Jamie Freeman, Director at Haringtons UK
“As with previous budgets, I don’t think that the announcements made by the Chancellor will ultimately make much of an impact at the upper-end of the property market.
“Abolishing non-dom status, over time, might make some UHNW international buyers think twice about living and investing in the UK, but ultimately, I can’t see this stopping much activity because the country is still seen as extremely desirable by many across the globe.
“Despite recent economic and political change, London and the UK will always remain an attractive place for international buyers and investors given its geographical position between Europe and the US, cultural capital and relative stability.”
‘We welcome the gradual phasing out non-dom tax status, rather than the sharp shock of abolishing it overnight’
Shaun Drummond, Director at Harrods Estates
“Given that a major section of our sales and lettings market is based on international buyers and landlords purchasing and investing in Prime Central London, we welcome the news that there will be a gradual phasing out non-dom tax status, rather than the chancellor inflicting the sharp shock of abolishing it overnight.
“However, this announcement comes at a time when international buyers are already paying a 2% surcharge on Stamp Duty, with those at the upper end of the market effectively taxed 17%, so without any new relief for international buyers the impact of increased Stamp Duty in the prime central property market will continue to be felt, especially in the current high interest rate environment.
“With PCL prices are still below the peak of 2014/ 2015 and central London property now offering relative value compared to other major world cities especially when you take into consideration the current relative weakness of sterling against the dollar and the euro, any additional increases or withdrawal of relief could impact the appetite for purchasing among international buyers and drive them to consider renting, especially at the upper-end of the market.’’
‘Reducing the higher rate of Capital Gains Tax should inject some extra energy into the housing market’
Nicky Stevenson, Managing Director at Fine & Country
“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.
“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.”
‘Abolishing Multiple Dwellings Relief feels like a sledgehammer to crack a nut’ –
Matt Spencer, tax partner at Kingsley Napley LLP
“It’s clearly true Multiple Dwellings Relief has been abused, but abolishing it feels like a sledgehammer to crack a nut. While this will end the abuse of spurious “granny flat” claims, it will also prevent some legitimate investors from investing. It will now be much harder to find an investor willing to buy those four flats above a parade of shops. The negative impact of this change, however, is greatly mitigated by the ability to claim commercial SDLT rates on purchases of 6 or more dwellings, and so bearing that in mind, the measures, on balance, seem a good thing.”
‘The Chancellor has missed the opportunity to bring in Stamp Duty reliefs’ –
Timothy Douglas, Head of Policy and Campaigns at Propertymark
“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.”
‘The absence of measures to address the national housing emergency is astonishing’ –
Mark Buddle, Head of Residential Development at property consultancy Bidwells
“The absence of measures to address the national housing emergency is astonishing.
“Financing pressures and an antiquated system have squeezed badly-needed housing delivery, with rents soaring across the country due to the chronically undersupplied market.
“Whether or not we provide solutions to this problem could be the defining political question of this generation.
“Without support for housing delivery, the UK will be unable to attract workers in areas of high productivity, which will only serve to entrench stagflation, low economic growth and increase the tax burden in the long-term.”
‘Disappointing to see the UK property market receive the Budget cold shoulder yet again’ –
Ed Phillips, CEO of Lomond
“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. 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.
“This resilient performance is no doubt why the Government has chosen to refrain from any property focussed initiative in the Spring Budget and it’s very much a case of no news is good news in this respect.”
‘Investment in Canary Wharf and Barking Riverside housing looks very promising’ –
Adam Stackhouse, managing director, developments and commercial investments at Winkworth
“The Government has identified the astonishing decline in Canary Wharf as a viable property investment for the future. This substantial ‘levelling up’ fund of almost a quarter of a billion pounds is vital in re-purposing many half-empty office buildings and providing p to 8,000 homes in this area and Barking Riverside also. This looks very promising and we hope it will serve as a successful template to re-purpose increasingly redundant business districts across the UK into much needed residential homes. However, it seems clear to me that these are short term attempts to fix the problem of housing supply rather than making use of the Housing Committee to galvanise the UK into a country that builds homes to suit the needs of its population. National Insurance reduction is indeed encouraging by putting more money into the pockets of the population, but this is unlikely to be enough to get the economy moving at the right pace when housing supply is in such dire need. We continue our calls for a National Planning Team to be parachuted into local government to solve this damaging issue.”
‘A budget with little fanfare’ –
Will Matthews, Head of Commercial Research at Knight Frank
“Overall, a budget with little fanfare, suggesting a gamble on more excitement this Autumn, and limited direct impact for the UK’s commercial real estate markets.
“The headline cut in national insurance was couched as an incentive to work, but as acknowledged in the reference to almost 1m current job vacancies, there isn’t all that much labour market slack left to take up. Helpful, yes – but of itself, unlikely to have firms dusting off expansion plans.
“There were plenty of nods to growth sectors – innovation, life sciences, film studios, to name a few. Again, helpful, but the sums and measures involved were not game-changing.
“Perhaps of greater immediate interest to the commercial real estate sector are the OBR’s revised forecasts. These now point to significantly lower inflation and somewhat higher growth over the coming years, and although largely just playing catch-up with City views, this new outlook is more supportive of much-anticipated interest rate cuts.
“Big questions over the level of public sector funding remain. What is clear, however, is that the private sector will be called upon to make up some of the shortfall in UK infrastructure investment – in the broadest sense.”
‘We can’t help but feel disappointed at a lack of considered focus on the property sector’ –
Jon Byers, Founder of Anderson Rose
“Each time a new budget is revealed we can’t help but feel disappointed at a lack of considered focus on the property sector. It could be pie in the sky thinking but incentives to encourage buy to let investment need to be reintroduced. Landlords and tenants are suffering from a lose-lose situation where despite significant rent rises landlords are still making a loss and leaving the market, which is then reducing the amount of stock available to rent and putting upward pressure on rents. The net result for tenants is that they are paying higher rents for properties that they have to fight over when they become available and landlords are having to top up their income each month in order to break even.
“On top of this, Stamp Duty is in need of urgent reform as it is keeping people from moving more regularly which stifles supply and keeps house prices high. There was a time for the government to cash in when the market was at its height and booming but it’s now in urgent need of support or we could see irreversible damage that could hinder a generation.”
‘I would like to have seen some further announcements related to the housebuilding and construction sectors’ –
Rutu Buddhdev, Founder of Amara Property
“The Chancellor’s Spring Budget revealed a large amount of tax giveaways. I believe the 2% personal tax cut is a very good thing as fast-growing economies, such as the USA, tend to have low taxes and this allows them to recover from financial crises faster. I would like to have seen some further announcements related to the housebuilding and construction sectors. Those within the industry have been imploring the government to improve their focus on the industry to support the delivery of new homes that will not only provide places for people to live but also create numerous jobs and support the economy in the process.
“I would also like to have seen more support for first time buyers and older buyers, looking to downsize. Some reduction or incentive on stamp duty would be appreciated by the sector as a whole, as this would provide a boost to the market and incentivise buyers to move now. This lack of focus could prove costly for the Government, especially given the current state of the economy, which could risk the party’s chances in the upcoming election.”
‘We’re not at all surprised that there’s been no adjustment to the SDLT rates’ –
Paul Cosgrove, Director at Finlay Brewer
“It was clear that the Chancellor was determined to reduce National Insurance by a further 2p which equates to apx £450 per annum for the average worker. We’re not at all surprised that there’s been no adjustment to the SDLT rates to increase property transactions and to encourage the full spectrum of buyers to consider their options whether that be to upsize or downsize. There are some clever ways in which both the Exchequer and buyers who need and want to move could have gained and this would inevitably increase transactions.
“We also feel that there had to be policies included to provide relief for Buy-to-Let landlords who have become an endangered species following years of increased taxes and red tape. The returns currently on offer for landlords make it more of a loss leader than profit generator that is seeing many sell up and move on, which in turn is putting upwards pressure on rents as there is less available stock and an ever-growing pool of tenants. Perhaps this was the ideal time to remove or reduce the additional 3% SDLT rate for buy-to-let purchasers to incentivise landlords and attract new ones. Ultimately, we won’t know but we can’t help but feel it was an opportunity missed.”
‘Very little for home-movers’ –
Tim Bannister, Rightmove’s property expert
“We had hoped the government would seize the opportunity to help first-time buyers and reform the outdated stamp duty system today, instead, home-movers are left with very little. There is a chance that the reduction in the higher rate of capital gains tax will mean some landlords to sell properties which could, in turn, increase choice for first-time buyers. Whilst any increase in supply for first-time buyers is welcome, we will have to wait to see how substantial it is, and it may also result in a further reduction in already-tight rental stock levels in the short term.”
‘A missed opportunity to support the rental sector’ –
Christian Balshen, Rightmove’s lettings expert
“Anything that makes homes more affordable to local residents in staycation hotspots, through either the lettings or owner occupier market, is welcome. The removal of tax reliefs for landlords of holiday homes in conjunction with lowering capital gains tax when they sell, may see more of these properties come to the sales market. However, it has become clear in the last few years that penalising landlords does not work to promote a functioning Private Rented Sector. This is another example of a missed opportunity to support the rental sector for the benefit of both tenants and landlords.”
‘Not one mention of the word ‘mortgage’’ –
Matt Smith, Rightmove’s mortgage expert
“Despite mortgages being one of the defining topics of 2023, there is not one mention of the word in the 98-page Spring Budget. Whilst a 99% mortgage scheme was reportedly considered, it appears to have been scrapped and then no replacement found. More innovation is needed to help first-time buyers with smaller deposits, and those who are struggling to borrow enough to get onto the ladder.”
