Support, Advice and Experience within the Property Market

The Spring Budget and Housing

From Robert Ulph on March 23, 2020

Amid fairly turbulent times and just weeks into his new role, the new Chancellor of the Exchequer, Rishi Sunak, delivered his first budget last week which brought with it a range of measures affecting the property industry.

Many had labelled this the Coronavirus Budget even before the Chancellor’s Budget speech and it was no surprise that plans for combating the spread of the disease took prominence. Much of it was not housing-specific but aspects do cover tenants being able to continue paying their rent if they are subject to taking time off work through sickness or self-isolation.

Statutory Sick Pay (SSP) will be now available from Day One (instead of Day Four) of any sick leave and SSP will be available for anyone advised to self-isolate, fit/sick notes will be available from NHS 111 with no need to travel to a doctor.

Those on Contributory Employment Support Allowance can claim from Day One instead of Day Eight, benefit claimants will not be required to attend Job Centres in person to claim, this can be done over the phone or online. Additionally, a £500 million hardship fund will be available for distribution via local authorities.

More generally, but to help tenants potentially is the National Living wage sees a 6.2% increase and the National Insurance threshold increases from £8,632 to £9,500 in the tax year 2020/21.

A stamp duty surcharge of 2% for non-UK residents will be introduced from 2021 and this has received a mixed response by those in the industry.

“If introduced, this policy allows those in the UK to have a better chance at purchasing a home,” commented Mark Hayward, Chief Executive of NAEA Propertymark. “However, overseas buyers tend to purchase properties in prime central London which are completely unaffordable to most homebuyers anyway. Therefore, this move will not help those that need it most. Ultimately, by energising surcharges, it is likely that purchasers will factor this additional cost into any offers they make on a property so prices may be pushed down in areas where overseas buyers are purchasing.”

The Budget did set out an ambitious package of investment to build high-quality affordable homes. This includes £12.2 billion for the Affordable Homes Programme and £400 million for Mayoral Combined Authorities and local areas to establish housing on brownfield land.

In addition, to help tackle homelessness a £650 million rough sleepers fund will support people into permanent accommodation.
The Chancellor also announced a £175 billion boost for infrastructure projects and while we have not been affected in this area, £120 million will be allocated for repairing all damage caused by the recent winter floods. A further £200 million will go directly to local communities experiencing repeated flooding for flood resilience.  Investment in flood defences will double over the next six years.

As always, if you have any questions on these issues or anything in the local property market, please call me.