News Blog

There were no fireworks for the property industry in yesterday’s Budget.

Chancellor Philip Hammond addressed MPs for more than an hour in the first Monday Budget since 1962, with jokes about business rate relief on public toilets. But little he said suggested the Government really does prioritise the “housing crisis”.

There were  no reversals of any of the previous tax attacks on landlords; nothing in the way of Stamp Duty exemptions to encourage down-sizers; and very little that suggested addressing affordability issues for either buyers or renters.

Hammond did announce plans to extend the first-time buyer Stamp Duty exemption to shared ownership and said the Government would provide £8.5m to develop ways that up to 500 parishes can allocate or permission land for homes sold at a discount to people with a direct connection to the area.

Hidden in the actual Budget document were plans to replace the current Help to Buy equity loan scheme when it ends in April 2021 with a new two-year initiative aimed solely at first-time buyers.

The value of property that can be purchased will be capped based on regional property prices set at 1.5 times the current forecast regional average first-time buyer price, up to a maximum of £600,000 in London.

It will end in March 2023 and the document said the Government does not intend to introduce a further Help to Buy equity loan scheme.

The Government also said it will publish a consultation in January on a Stamp Duty surcharge of 1% for non-residents buying residential property in England and Northern Ireland.

The planned 30% business rate cut for small retail firms seems unlikely to benefit high street agency branches.

There was no sign of the rumoured Capital Gains Tax exemption for landlords selling their buy-to-lets to long-term tenants.

Instead, landlords were hit with plans to reform lettings relief so that it will only apply where the owner of the property is in shared occupancy with the tenant.

The final period of exemption will also be reduced from 18 to nine months.

Michelle Niziol, chief executive of investment firm Michelle Niziol Bespoke Property Solutions, said: “It was tricks rather than treats for landlords during the Chancellor’s autumn Budget, as new legislation further restricts lettings relief.

“This legislation is a punishment to individuals who have worked hard, and chosen to invest their hard-won earnings in property.

“Limiting lettings relief to properties where the owner is in shared occupancy with the tenant negates all the benefits that lettings relief was meant to offer.”

David Smith, policy director for the Residential Landlords Association, said the Budget “failed tenants”, while others said the Chancellor didn’t go far enough on Stamp Duty, suggesting yet another missed opportunity to give a boost to second steppers or last-time buyers.

David Westgate, group chief executive at Andrews Property Group, said: “News that Stamp Duty would be abolished for all first-time buyers of shared ownership properties up to £500,000 should be welcomed.

“It doesn’t, however, go far enough.”