Over the last few budgets, the property market has been fuelled to some extent by the announcements of land tax holidays, but these are now definitely at an end.
Moving forward, the budget impacts the property market in many ways, so it’s worth keeping up to date with the latest budget announcements to understand how it might impact your home ownership, buy to let, and property investment objectives and plans.
The key updates that are useful to be aware of are, firstly, understanding where the government thinks the economy is going into the future, as this can impact heavily on property market confidence, then specifically:-
Many of the changes were announced before the actual budget itself – which always helps in getting out a speedy response, so thank you Mr Sunak!
Overall though, there weren’t any particularly ‘amazing’ announcements that will affect property into the future, the main impact is the assessment of the economy, which, being so buoyant is probably the best boost to the property market.
And blimey, what a smile Mr Sunak started with! And why not? We know that there are more buoyant predictions than expected for the economy and it’s perhaps this that is really the best news for the property market. And the good news which is unmistakable, in that the economic indicators versus the forecasts are so much better than thought, even from a few months ago.
Overall, apart from the potential impact of inflation and that this may raise interest rates (and mortgages), the news was all positive on expected recovery, growth, wages and unemployment.
Although it won’t impact on everyone, the rise in the minimum wage to £9.50 and the reduction in the tapering of Universal Credit tax when people work, from 63% to 55%, does help any landlord renting to someone on benefits – as long as they are working.
However, any homeowner needs to understand that this will impact on the cost of servicing and maintaining a home as costs are likely to go up. If you are renting, now might be a good time to review rents, check they are fair and you aren’t under charging.
Fuel duty being frozen again can help the property market as it’s easy to rack up a bunch of miles when letting or looking for property investments.
The news on housing investment wasn’t really ‘news’ as such, more of a repeat of current policies and investment plans, but briefly breaks down to 180,000 new affordable homes being funded, infrastructure changes to enable an additional million accessible homes to be built.
Of interest for property developers might be the £1.8bn extra investment to bring forward 1,500 hectares of brownfield land, particularly small plots in local areas, so it might be worth checking if any of these are in your area.
Key areas that will receive additional transport infrastructure include Greater Manchester, West Midlands and West Yorkshire and as above, it’s worth doing some research to check out if new investments, such as the size of Hinkley Point C or Sizewell nuclear power stations, or more money for creating electric vehicles in the North East and Midlands, can create new jobs and that means new property investment opportunities.
Well for those that do like a low strength alcohol drink (I am a particular fan of sparkling white wines), the good news is that anything less than 8.5% strength should see a reduction in price. Not only that, but small brewers will be supported further encouraging innovative craft alcohol. And I’m thrilled there will be support for pubs, which can offer a safer environment for drinking versus being at home, but as we have three in our local village that have suffered severely during the pandemic, they genuinely deserve a break.
And it’s almost a boost to the property market that there wasn’t any ‘bad news’ in the budget – in that property taxes weren’t increased.
However, as always, bear in a mind an enormous document that is produced for the budget there may be further announcements over the next few days which we’ve yet to be aware of. Secondly it’ll take a little time for clever statisticians to work out how much the money announced today was ‘new money’, ‘money later than expected’ or just shifting expenditure from A to B, so no extra money at all.
Need more detail on the budget? Here are some great articles to take a look at which explain the budget changes:-