Philip Hammond used this week’s Budget to announce spending spree in what he called “a budget for Britain’s future” - and one which heralds the end of austerity.
Improved deficit and upgraded growth forecasts allowed the Chancellor to loosen the purse strings, releasing more than £100billion to cut taxes and increase spending.
Here, Daniel Owen-Parr, head of professional sector and auction at specialist lender Together looks at what Monday’s Budget mean for first-time buyers, home owners – and professionals working in the property industry.
First time buyers
The abolition of stamp duty for first time buyers purchasing homes worth up to £300,000 was one of the highlights of last year’s autumn budget. Since then, it has helped 121,500 people, the Chancellor announced in this year’s speech, with the number of people buying their first homes at its highest level for over 11 years.
This will now be extended to first time buyers of shared ownership properties worth up to £500,000.
And the tax cut will be backdated to anyone who has bought a shared ownership home since last year’s budget. At Together, we’ll consider shared ownership mortgages for ex-council houses, flats and maisonettes, high rise properties - including those above six floors - properties with poor valuations, and those of non-standard construction.
There were two new changes to the main residence relief for people selling their homes. The 18-month exemption from paying capital gains tax has been shortened to nine months, meaning there will be a shorter period for people who are moving house and not being subject to capital gains tax.
Mr Hammond also earmarked an extra £500million for the Housing Infrastructure Fund, to help local councils to build homes as a way of easing the housing crisis. The extra money could build 650,000 extra homes, the Chancellor said.
Perhaps one of Mr Hammond’s most eye-catching announcements - although one which had been predicted before Monday’s budget - was to create more homes on the High Street. As part of his £1.5billion investment to help the UK’s struggling retailers, he announced the creation of a £675million fund to help local authorities. Some of this money could be used to change the use of commercial property into homes.
We’ve worked with developers who we’ve provided with bridging finance to turn anything from disused office blocks and smaller retail units into homes. These often tend to be more complex cases, requiring a hybrid of traditional commercial finance and development funding, wrapped up as one arrangement. Specialist lenders like Together have the experience necessary to be able to help in these more complicated scenarios.
The Chancellor held off targeting the private rental sector again. Pre-budget, there had been rumours that there could be a capital gains tax cut for landlords looking to sell to their tenants, with the saving split between the buyer and seller. However, this didn’t materialise on Monday, but the Government will launch a consultation into further changes at some point in the future.