What do the latest Spring Budget changes mean for you?

Whether you’re a buyer, seller or landlord, read on to find out how Jeremy Hunt’s Spring Budget could affect your property decisions this year.

What does the budget mean for you?

For sellers, buyers and landlords, here’s your Spring Budget summary:^†

• Capital gains tax for residential properties will be reduced from 28% to 24% from the 6th of April 2024, encouraging second home-owners to sell their properties.
• National Insurance will be cut by 2%, equivalent to £450 extra per year for employees.
• First-time buyers who are buying property through a nominee or bare trustee now also qualify for the first-time buyer stamp duty land tax relief in England. A nominee or bare trustee is a person who is appointed by the first-time buyer as the legal owner of the property.
• From the 6th of April 2025, the Government will abolish the Furnished Holiday Lettings tax regime, levelling the playing field between short-term and long-term lets.
• The stamp duty relief for those buying multiple dwellings in England will also be abolished from the 1st of June 2024. Note that any property transactions “with contracts that were exchanged on or before 6th March 2024 will continue to benefit from the relief regardless of when they complete.”^†

What’s the economic forecast for 2024?

Previous to the Budget, it was announced that the UK has now entered a “technical” recession.^^ This means that the UK’s GDP has not grown over the last two quarters, however the ONS was also quick to announce that these early estimates of GDP are subject to revision. In the Spring Budget, Hunt touched on the fact that tackling inflation is painful and comes with slow growth, however, his outlook for the UK remained positive, as he announced that this Government would work to provide families with permanent tax cuts, not just temporary measures.

In the Spring Budget announcement, Jeremy Hunt underlined the importance of building up the UK’s resistance to future economic shocks, and to further bring down inflation to the 2% threshold set out by the Bank of England. Over the last year, inflation has fallen from 11% to 4%, and the Office for Budget Responsibility’s (OBR) forecasts a further drop to 2% in just a few months' time.

It was also announced that since 2010, the UK has grown faster than Germany, France and Italy, with the UK’s growth being 1.5% higher than predicted. Furthermore, the International Monetary Fund (IMF) claimed that, over the next five years, the UK will continue to grow faster than the three largest economies in Europe.

What’s currently happening in the property market?

Both Rightmove’s and Halifax’s house price indices have reported monthly and annual increases. According to Halifax, the latest average house price is £291,029, marking a monthly increase of 1.3% and an annual growth of 2.5%.* For sellers, the current market conditions suggest it could take over two weeks longer to find a buyer compared to last year, so patience and strategic pricing are key.* However, there is positive news, as the market is showing increased activity from buyers, with Rightmove reporting a 7% uptick in buyer enquiries.*

How will these changes affect landlords and the rental sector?

Across the UK, average rents are now £1,262pcm, which is an increase of 7.4% when compared to last year and a whopping 18% higher than two years ago.^ Comparing all the regions, the East Midlands experienced the biggest annual change with 9.8%, followed by the West Midlands and the South East, with 9.3% and 8.9%, respectively. Scotland’s growth still holds strong at 8.8%, and Wales is also up there with an annual increase of 6.0%.^

As many continue to face challenges with the increased cost of living, it’s important for landlords to adopt a competitive pricing strategy to attract tenants, while also working to keep their void periods to a minimum.

How does this impact buyers, sellers and landlords regionally?

According to Halifax, both Scotland and Wales have experienced a 4% annual rise in house prices, reaching £206,087 and £219,609 respectively.* Additionally, the North West (+3.2%), Yorkshire and the Humber (+2.8%), North East (+2.0%) and East Midlands (0.5%) all experience an annual house price growth. Only the South East saw a decrease in annual house prices with a 2.3% decline.*

Curious to find out more about what these changes mean for you and your property? Talk to one of our property professionals and get started today by finding out your property’s worth in today’s market.