2024 Spring Budget: Property and Housing Announcements

The 2024 Spring Budget was recently announced, with the hope of efforts to support first-time buyers and the possibility of a 99% mortgage scheme. This would mean a prospective home buyer pays a 1% deposit on their home, but ultimately monthly mortgage payments will either be higher or paid off over a longer time-line. Overall, however, the measures announced are thought to only benefit a relatively small number of home buyers and sellers.???

Mortgage expert, Matt Smith, at Rightmove said, ‘Despite mortgages being one of the defining topics of 2023, there is not one mention of the word of the 98-page Spring Budget. Whilst a 99% mortgage scheme was reportedly considered, it appears to have been scrapped and then no replacement was 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.’??

Here, we’re going to take a closer look at the announcements, and the implications for the property market:?

Stamp Duty Land Tax

The government has announced new legislation as part of the Spring Budget abolishing Multiple Dwellings Relief, a measure to change Stamp Duty Land Tax going forward.? The hope was that, by paying less stamp duty, landlords will invest in more new homes and be able to rent them out to tenants on a much more long-term basis. However, the government has decided instead to forgo on this relief. There had been calls for existing stamp duty thresholds - set to expire in spring 2025 - to be made permanent, but the lack of any announcement in Jeremy Hunt’s speech now makes this seem unlikely.??

Reversal of Non-dom Status??

The budget has also announced significant changes to the taxation of non-UK domiciled individuals (AKA ‘non doms’) currently living in the UK. This came as something of a surprise, although, as yet, details are scarce as the legislation is yet to be fully drafted and will likely be subject to change. But from April 2025, the tax someone pays in the UK will be replaced by a new residence-based regime, where all UK residents who stay in the country for four years will pay the same tax on all their foreign income and gains, regardless of their domicile status. Chancellor Jeremy Hunt said this is, ‘a more generous regime than at present and one of the most attractive offers in Europe.’?

Regeneration Schemes?

The budget also announced two major regeneration schemes in London, set to transform Canary Wharf and Barking Riverside with a reported ￡242 million of new investment. The plan is to create 7,200 new homes in Barking and a further 350 in Canary Wharf. The homes in Barking are part of the remodelling of brownfield land, turning areas that have been previously abandoned into new and thriving communities. Hunt’s budget has also allocated ￡4 million to deliver 10,000 new homes through the newly established Euston Housing Delivery Group, and a further ￡20 million is earmarked to build a further 3,000 affordable properties in the district via local community groups.?????

Ending Short-term Rentals?

Due to many rentals being let out to tourists at only two or three nights at a time, the Chancellor's budget has addressed concerns that there aren't enough long-term rentals for UK tenants. Jeremy Hunt said that The Furnished Holiday Lettings Tax Regime (FHL) ‘is creating a distortion meaning that there are not enough properties available for long term rental by local people.’ Central London councils have reported a huge increase in complaints from residents, due to an estimated 12,000 short term lets in Westminster alone. ‘I am going to abolish the Furnished Lettings Regime,’ Hunt said, a move that will raise a reported ￡300 million that can help support local communities.??

Lifetime ISA Cap to Remain Unchanged?

For the last few years, campaigners have been advocating for changes to a government scheme that fines first-time home buyers if they use it to purchase a home costing more than ￡450,000. The founder of MoneySavingExpert.com, Martin Lewis, has called for legislation in regards to lifetime Isas to change, allowing people to save for their own home or for their retirement. He told Guardian Money that the scheme is ‘broken’, due to it taking money off some first-time buyers, resulting in them making a loss on their investment.??

Sources: City AM, The Guardian, LondonlovesProperty