Propertymark has urged the Chancellor not to waste the upcoming Spring Budget and focus on housing.
The Chancellor of the Exchequer, Jeremy Hunt, will present his Spring Budget to the House of Commons on Wednesday 6th March 2024.
The professional body for property agents says that the Chancellor has many leavers at his disposal to boost the economy by introducing measures for the housing market. These include expanding the First Homes scheme to the second-hand housing market. First-time buyers can currently purchase a home at 30 to 50 per cent less than its market value as long as it is a new build purchased through the developer. By expanding the scheme into the second-hand housing market, Propertymark believes it would remove many obstacles for first-time buyers and stimulate growth throughout the housing market with onward chains.
Reducing Stamp Duty on buy-to-let property should also be looked at to help meet the huge demand for rented property and incentivise people to become landlords and rent out their property. By temporarily removing the 3% surcharge, it would help lessen a landlord’s tax burden and thereby prevent it from being passed on to tenants in the form of surging rents.
Last time buyers should also not be overlooked and should also receive support via a reformed Stamp Duty Land Tax. For those aged 55 or over, Propertymark is calling on HM Treasury to remove Stamp Duty Land Tax on any purchases they make. Stamp Duty Land Tax rates such as a 5% rate on all properties between £250,001-£925,000, and a 10% rate on all properties beyond this price up to the price of £1.5 million, are seen as a hindrance to those who intend to downsize. Removing these Stamp Duty Land Tax rates would enable them to achieve their aspiration of rightsizing as they get older.
The Stamp Duty holiday during the pandemic activated in July 2020 enabled families to upsize and relocate – on average people spend £8k when they move so it has huge economic benefits.
Finally, the UK Government must look at the impact of Section 24 of the Finance Act and review all property taxes for private landlords to encourage growth in the private rented sector. Section 24 of the Finance Act 2015 means that landlords are no longer able to claim mortgage interest as tax deductible. Research conducted by Propertymark found that Section 24 had caused 53 per cent of buy-to-let properties sold in March 2022 to leave the private rental sector, and that there was a 49% reduction properties available to rent per Propertymark member branch in March 2022 compared to March 2019. Thanks to rising interest rates, landlords have had to increase tenants’ rent to pay for the costs. Reducing a landlord’s expenditures would also help ease their tax burden and help them pay for measures to enhance the quality of their rental properties. Timothy Douglas, Head of Policy and Campaigns at Propertymark, said:
“Rishi Sunak should remember that as Chancellor he brought in a Stamp Duty holiday during the Covid-19 pandemic that encouraged many people to purchase a home, which had huge knock-on impacts for the wider economy. He really should consider bringing this back in during a time when rising interest rates and inflation have both made it harder for people to purchase the home of their dreams.
This Budget will likely be UK Government’s last one before a general election. Housing was omitted in the Autumn Statement, yet it is a huge issue for everyone. Housebuilders need incentives to build more homes, and homebuyers also need incentives to move. Landlords need incentives to stay in the market, new landlords to join and existing good landlords to expand their portfolios to help meet the huge demand for property to rent. The Chancellor and UK Government must not waste this opportunity.”
