What does the Spring Budget mean for the property sector?

David Meek, Interim CEO, This Land explains:

Despite it being an election year, UK chancellor Jeremy Hunt’s Spring budget gave little to invigorate the real estate market, although there were a number of measures which point towards some modest encouragement for the property sector.

He confirmed that the plans for Cambridge’s Development Corporation were moving forward, with “over ￡10 million invested in the coming year to unlock delivery of crucial local transport and health infrastructure” and that its long-term funding would be addressed at the next Spending Review.

Any lowering of capital gains tax for residential property sales is welcome and the cut in the higher rate from 28% to 24%, whilst only impacting those with second homes, may encourage more properties onto the secondary market and help supply shortages. The realignment of the tax treatment for furnished holiday rentals with those of longer term assure-hold tenancies may also ease the pressure in particular hot spots. However, strong pre budget rumours of 99% mortgages and/or reductions in stamp duty for first time buyers proved to be unfounded.

It was notable that the government announced match funding ￡3million of industry-led ?programmes for planning capacity in the next Spending Review. This complements the Competition and Markets Authority report published on 26th February 2024, proposing reforms for the planning systems.

Overall, the various measures announced may help supply on the margin, but importantly should continue to give further stability and confidence to the sector after a challenging couple of years.