What Does The Spring Budget Mean For The Property Market?

Welcome to Centrick Invest’s exclusive breakdown of the Spring 2024 Budget and its implications for the property market. Chancellor Jeremy Hunt unveiled his much-anticipated budget this afternoon, setting the stage for critical developments that could impact property investors and homeowners alike. Let’s delve into the key highlights and what they mean for you.

National Insurance Relief:

The standout feature of the budget is the significant reduction in national insurance contributions. Effective April 6th, both employed and self-employed individuals will enjoy a further 2p cut, supplementing the previous reduction announced in the 2023 Autumn Statement. This move mirrors an income tax cut, putting more money back into the pockets of workers and marking the lowest personal tax rate since the 1970s. As it pertains to the property market, this could mean that home movers are able to save more money for their next property deposit or increase their rental budget.

Childcare Support:

Hunt reaffirmed his commitment to working parents by extending free childcare offerings and proposing regulatory shifts to benefit collective household incomes. Immediate relief measures include increased thresholds and expanded upper limits for childcare benefits so that more families can access support, bringing more parents back into the workforce.

Multiple Dwellings Relief and Capital Gains Tax Reform:

In a bid to curb abuses within the property sector, Chancellor Hunt announced the elimination of multiple dwellings relief for the purchase of multiple units at once while simultaneously reducing the higher rate of capital gains tax. These measures aim to stimulate property transactions and encourage a more dynamic market.

Holiday Lettings:

The Chancellor outlined plans to reform tax incentives to promote long-term rentals over holiday lettings, addressing the supply-demand imbalance within the property market.

Inflation and Economic Outlook:

Positive indicators suggest a potential boost to property price growth amid decreasing inflation rates, aligning with government targets and benefiting investors. The Chancellor explained that the rate of inflation has decreased to 4%, and is on a strong trajectory to reduce even further in the coming months to 2%: this means that the government will have achieved their inflation goal a year earlier than anticipates.

Levelling Up Initiatives:

Hunt’s commitment to the Levelling Up agenda was underscored by substantial investments in community-led housing schemes and regional development projects across key areas like Sheffield, Blackpool, and London’s Canary Wharf. The Chancellor also spoke of additional funding for the West Midlands Combined Authority.

What did the Chancellor omit from the Spring Budget?

While the reintroduction of 99% mortgages and income tax reductions didn’t materialise, Chancellor Hunt still announced changes and policies to benefit the property sector, namely the reduction of capital gains tax. Furthermore, despite not issuing a reduction to income tax, the Chancellor’s amends to national insurance are set to similarly ensure that both employed and self-employed workers keep more of the money they earn. 

Stay In The Loop With Centrick Invest

Centrick Invest remains vigilant, recognising the importance of balanced policy interventions to sustain a resilient and thriving property market. Stay tuned for further insights and updates as we navigate the evolving landscape together.