March budget due to be game-changing for the property market
10/03/2020 - Attwell Solicitors
After years of Brexit-based uncertainty in the property sector, 2020 looks set to be a strong year, with some predicting a ‘Boris bounce’ as pent up demand rejuvenates the market. And our first real clues as to how the Conservative majority government plan to boost the housing sector will come on March 11th, when Rishi Sunak reveals what’s in his red budget box. And whilst we can’t know for sure what will be announced, the experts at Attwells can make some educated predictions based on various leaks, hints and information we’ve picked up on in previous months.
Why is this budget so important for the housing market? It’s the UK’s first budget as a non-EU state, and Boris’ first as the leader of a majority government. This will be his chance to set out his priorities. And one thing he’s been clear about is his desire to free up and support homeowners. So whilst he may have changed chancellors, we are confidently expecting other big changes to how the housing market is supported from Westminster.
Will the mansion tax be announced? It has long been rumoured that Boris and Sajid were lining up the so called ‘mansion tax’ for homeowners with bigger properties. However, what is considered a mansion for tax purposes, and how this would actually be collected, isn’t yet clear. With many Conservative MPs opposing this policy, and a new chancellor at the helm, it’s possible that the mansion tax may be delayed, or even dropped entirely.
Getting on the housing ladder will get easier. First time buyers have reason to be hopeful, if the Queen’s Speech is anything to go by, where it was announced the government were planning to take steps to support first-time buyers, and encourage home ownership in general. Conservative sources have also suggested plans were being considered to provide 30% or higher discounts to locally based first-time buyers. Of course, solid details have yet to emerge, and the March budget will likely clarify whether this discount will be for private sector, council or housing association properties. It also remains to be seen what the definition of a ‘local’ buyer is. However, we are expecting positive news for first time buyers.
Easing stamp duty. The government understand that a healthy housing market is a strong driver of economic growth, so it’s possible the budget might have something to say about cutting stamp duty rates, possibly at the lower end of the market. An initial idea to raise the stamp duty threshold to £500,000 was dropped from the Conservative manifesto… could this be revived for the 2020 budget? It’s not out of the question.
Feeding the demand for new houses. As the demand for homes increases, we could see further measures announced in the 2020 budget that allow more land to be released for the purposes of building properties. New funds could also be allocated to local authorities and housing associations which enable building schemes.
Relaxing affordability tests. Since the 2008 financial crisis, affordability tests have prevented many from even considering getting onto the property ladder. There are rumours that plans to allow mortgage lenders to relax these rules are in the pipeline, alongside new guidelines that will give people access to longer-term loans, which will lower monthly repayments, and open up the prospect of a place on the housing market to more people.
Whatever announcements are made during the budget next month, Attwells will be there to help you buy or sell your property. Our trusted and transparent conveyancing solicitors are based in Ipswich, Colchester & North London, and have expert knowledge and experience that will ensure you enjoy a smooth transaction. Get your instant online conveyancing quote today.
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