Chancellor Jeremy Hunt has delivered his spring budget ahead of the upcoming general election, with a raft of announcements set to impact the property sector.
Going into the announcement, industry experts were largely hoping for measures designed to ease the pressure facing UK property right now - particularly around issues such as affordability, undersupply of property and challenges in the UK rental sector.
Below is a breakdown of the key property-related points from the Spring Budget 2024, breaking down what it means for homebuyers and renters, plus a brief round up of other key announcements.
Changes to Capital Gains Tax
One of the key property-related points of the budget - especially for landlords and property investors, is the Capital Gains Tax (CGT) cut. The rate has been decreased from 28% to 24%, which means more profit when investors come to sell.
This will be particularly important for those who are looking to offload assets and may lead to more stock in the market going forward. While most investors and landlords don’t necessarily invest for short-term gains and instead rely on long-term rental income, it’s good news for investors that want to sell assets with the view of buying elsewhere or reinvesting the money into other assets.
Changes to Short Term Lets
Within the spring budget, Hunt announced changes to tax relief for short term lets. As of April 2025, the tax relief available on furnished holiday lets in England will be removed.
Over the last five years, the short-term rental sector has become incredibly profitable - typically more so than long-term letting. Driven by the number of people having holidays in the UK or using short-term accommodation for work, landlords focused on short-term letting has become a distinct demographic.
With these changes, short-term and long-term lets are treated the same in terms of tax purposes, which should boost the number of properties being let on a long-term basis.
Changes to Stamp Duty
Another major change in the budget is the end of stamp duty relief for multiple dwellings.
In instances where a buyer purchased multiple properties in the same transaction - such as several units within the same apartment development - there was relief that led to a lower tax bill. This has now been abolished.
While this will lead to more money entering the economy, there’s worries it may deter buy-to-let investors who often purchase several properties at once due to the reduced Stamp Duty.
Without the supply in the market - and ultimately fewer landlords - this could result in higher rents for tenants.
How else will the Spring Budget impact homebuyers?
The housing market is often considered an extension of the economy. While there haven’t been any specific points laid out in the statement related to homeowners, anything that supports higher take-home pay directly supports buyer confidence and improves affordability challenges.
As such, ongoing cuts to National Insurance for workers - amongst other wider tax cuts - are generally welcomed by the housing market.
While some experts were expecting stronger changes towards Stamp Duty to encourage more buyers to enter the market, the housing market continues to show its resilience and price falls have been significantly better than expected.
What other key points were in the Autumn Statement?
Some of the other key headlines included in today’s Spring Statement include:
- Class 1 Employee National Insurance Contributions are being reduced by 2p - from 10% to 8% - as of April 2024.
- Class 4 Employee National Insurance Contributions are being reduced by 3p - from 9% to 6% - as of April 2024.
- The threshold for High Income Child Benefit is being raised from £50,000 to £60,000 as of April 2024, with tapered charges between £60,000 and £80,000.
- The current tax regime for non-UK domiciled individuals is being scrapped and replaced with a new scheme - anyone who has been a tax resident in the UK for over four years will pay UK tax on foreign income and gains, regardless of domiciled status. This may impact the number of foreign investors in prime residential markets.
- The government has announced a new savings product, British Saving Bonds. Launching in April 2024, it’ll be a guaranteed interest rate, fixed for three years and offer another way of saving for consumers.
