How Will the 2024 Spring Budget Affect the UK Property Market?

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How Will the Housing Market Change Following the Spring Budget?

The Spring Budget was delivered today by Chancellor Jeremy Hunt, which outlines the government’s tax and spending plans for the coming year, along with a full fiscal statement from the OBR.

The budget covers a range of financial considerations for the government, from tax to public spending.

So, how will these announcements affect UK property investments in 2024?

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Spring Budget Highlights for Property Investors

The OBR expects the economy to grow by 0.8% this year and 1.9% next year, which is 0.5% higher than the autumn forecast. They also believe that the economy will continue on this trend until 2027.

In a surprise move from the Chancellor, the higher rate of capital gains tax on residential property will be reduced from 28% to 24%. This is intended to increase revenues as more transactions occur in the property market.

Stamp duty relief has been abolished for people buying more than one dwelling. Hunt cites regular abuse of this system as the reason for doing away with it.

He also announced that the government would scrap tax breaks that make short-letting more profitable than finding long-term tenants. This will have a negative effect on the holiday letting sector and possibly encourage more long-term letting instead.

In terms of regeneration, Canary Wharf has been announced as a recipient of Levelling Up funds. The Chancellor also stated that he has allocated £188 million for projects in Sheffield, Blackpool, and Liverpool. He claimed that the government is on track to deliver over one million homes by the end of this parliament.

However, according to Richard Donnell, Executive Director at Zoopla, the supply of UK housing has increased but has now stalled, stating: “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. More funding is needed for social and affordable homes and housing infrastructure investment to unlock supply.”

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How Will These Announcements Affect the Property Market?

Will Matthews, Head of Commercial Research at Knight Frank, commented: “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.”

This is good news for those worried about destabilising forces, but property investors will inevitably be left wanting more. For many, this was a missed opportunity for the government to provide more incentives for investors and alleviate the current housing crisis.

The OBR’s forecasts are more optimistic, suggesting lower inflation and higher growth in the next few years, hopefully leading to interest rate cuts.

Further Reading: Discover how to make money from property and the best investments for monthly income with our 2024 investment guides!

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Is UK Political Uncertainty in 2024 Going to Affect the Property Market?

As 2024 is a general election year, it can be considered a year of political uncertainty, but will this have a negative effect on the property market?

Property experts say it is unlikely to make a huge difference to the market. A recent JLL report stated that the UK election is unlikely to significantly impact real estate investment activity based on the current policy proposals from the major parties.

In fact, according to research from Hamptons, a pre-election boost for market activity has even been observed in previous years.

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