{"id":6093100,"date":"2023-03-16T08:50:13","date_gmt":"2023-03-16T08:50:13","guid":{"rendered":"https:\/\/www.buyassociationgroup.com\/en-gb\/?p=6093100"},"modified":"2023-03-16T08:50:13","modified_gmt":"2023-03-16T08:50:13","slug":"in-budget-uk-property","status":"publish","type":"post","link":"https:\/\/www.buyassociationgroup.com\/en-hk\/news\/in-budget-uk-property\/","title":{"rendered":"What was in the Budget for the UK property sector?"},"content":{"rendered":"

Chancellor Jeremy Hunt revealed a positive shift in the country’s economy for 2023 in his Spring Budget announcement, and some subtle changes that could affect the UK housing market.<\/strong><\/p>\n

Many described yesterday’s Spring Budget as a “low-key” affair, with the headline changes being an overhaul in the childcare sector, a focus on cost-of-living support, and some alterations to the benefits system.<\/p>\n

While Hunt did not directly turn his attentions to the UK property market<\/a> – or in particular to the buy-to-let sector, around which many in the industry had hoped for change<\/a> – some of the new policies could end up having a positive impact on the housing sector.<\/p>\n

Levelling up in the Budget<\/h4>\n

The government’s levelling up agenda is certainly nothing new, but this latest Budget saw him refer to plans to create 12 new investment zones across the country, which he likened to “12 potential Canary Wharfs” in a nod to the well-known economic area in London.<\/p>\n

Local authorities are being invited to apply for the funding, which will include \u00a380m worth of support towards the development of such an investment hub, as well as enabling the area to retain local taxes.<\/p>\n

The reason this could be good for housing markets is because any investment focused away from the capital will bring jobs, people, interest and ultimately housing to these areas, boosting some already strongly performing property markets.<\/p>\n

Areas the Chancellor honed in on in his Budget were the West Midlands, Greater Manchester,<\/a> Liverpool<\/a> and Teesside. The West Midlands and Greater Manchester will also receive new multi-year devolution funding deals, while also being allowed to retain business rates.<\/p>\n

Cost-of-living focus<\/h4>\n

It was probably no surprise that there was a relatively large onus placed on cost-of-living support in this week’s Budget. Inflation remains extremely high, as do energy costs<\/a>, which is squeezing the budgets of most households – particularly through the winter.<\/p>\n

Again, any support in this area will inadvertently provide a boost to the housing market, with fewer rent arrears in the private rented sector, and more appetite and affordability from buyers and investors.<\/p>\n

Hunt announced that the energy price guarantee already in place will remain at \u00a32,500 until July, which will come as a relief to many after it was expected to increase to \u00a33,000. This is expected to save the average family around \u00a3160.<\/p>\n

\u201cSome people remain in real distress, and we should always remain ready to help when we can,\u201d said the Chancellor.<\/p>\n

There has also been a new approach when it comes to households who use prepayment meters for their energy. Often, suppliers charge higher rates on such meters, which affects the poorest household, so Hunt has pledged to \u201cbring their charges in line with comparable direct debit charges\u201d.<\/p>\n

Corporation tax<\/h4>\n

In the property investment<\/a> space in particular, corporation tax takes effect when people operate their investment properties through a limited company structure. Limited companies have become increasingly popular in recent years, particularly since tax changes mean mortgage interest relief can no longer be claimed.<\/p>\n

Those who buy, sell and rent out property through a limited company are subject to corporation tax on their income (such as rental income), rather than income tax. For those who would be higher rate tax payers, this can save money, as the rate before the Budget was 19%.<\/p>\n

From April, companies earning more than \u00a3250,000 in profits – including limited companies – will be liable to pay 25% corporation tax. This will of course not affect the vast majority of people operating limited companies, but is something to be aware of for those earning above the threshold.<\/p>\n

Comments from the housing industry<\/h4>\n

Jatin Ondhia, CEO of\u00a0Shojin<\/a>, said: \u201cPrudence and stability were clearly right at the heart of Hunt\u2019s Spring Budget. Undoubtedly, the hangover effect of his predecessor\u2019s gargantuan economic gamble – and the corrective fiscal squeeze that followed – left little room for any wild cards.<\/p>\n

\u201cFrom the perspective of where the government and economy found itself in late 2022, a relatively quiet Budget is not a bad thing. It shows they are being financially responsible. However, at a time when sky-high inflation is compounding the housing crisis, is no news really good news?<\/p>\n

“Building costs are through the roof and access to finance remains a big issue for developers, in turn damaging efforts to boost the UK’s housing stock.<\/p>\n

\u201cQuite ridiculously, the revolving door for housing ministers has left the UK with six different MPs holding the role in the space of a year, while the scrapping of mandatory housebuilding targets, means that what we needed today was some clear policies to get Britain building.<\/p>\n

“While all eyes will remain on Hunt and Sunak\u2019s conservative fiscal policies, the lack of decisive action on planning reforms, construction output and the lack of affordable homes could be a dangerous oversight. Evidently, the private sector will have to forge ahead to ensure property development continues at pace.”<\/p>\n

Paresh Raja, CEO of\u00a0Market Financial Solutions<\/a>, said: “It’s no secret that there are issues requiring attention in the property sector, most notably where housebuilding activity, planning regulations and the national housing stock are concerned.<\/p>\n

“Clearly, as Hunt looked down his list of priorities for this particular Budget, these items were overlooked in favour of other pressing concerns.<\/p>\n

“In truth, the property market could benefit from the Chancellor’s prudent economic approach. While there may not have been any noteworthy policies or investments relating specifically to property, his efforts to combat the cost-of-living crisis and bring much-needed stability to the economy should be welcomed.<\/p>\n

“We saw how tumultuous the effects of the mini-Budget were back in September. The ill-fated announcement fuelled significant interest rate changes and a great deal of uncertainty.<\/p>\n

“Hunt has favoured a cautious approach, and the property market will likely benefit from a sense of economic calm, particularly if inflation continues to fall and interest rate hikes come to an end.”<\/p>\n","protected":false},"excerpt":{"rendered":"

Chancellor Jeremy Hunt revealed a positive shift in the country’s economy for 2023 in his Spring Budget announcement, and some subtle changes that could affect the UK housing market. Many described yesterday’s Spring Budget as a “low-key” affair, with the headline changes being an overhaul in the childcare sector, a focus on cost-of-living support, and… Read more »<\/a><\/p>\n","protected":false},"author":1069,"featured_media":6027700,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[59,6],"tags":[205,243],"acf":[],"_links":{"self":[{"href":"https:\/\/www.buyassociationgroup.com\/en-hk\/wp-json\/wp\/v2\/posts\/6093100"}],"collection":[{"href":"https:\/\/www.buyassociationgroup.com\/en-hk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.buyassociationgroup.com\/en-hk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-hk\/wp-json\/wp\/v2\/users\/1069"}],"replies":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-hk\/wp-json\/wp\/v2\/comments?post=6093100"}],"version-history":[{"count":0,"href":"https:\/\/www.buyassociationgroup.com\/en-hk\/wp-json\/wp\/v2\/posts\/6093100\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-hk\/wp-json\/wp\/v2\/media\/6027700"}],"wp:attachment":[{"href":"https:\/\/www.buyassociationgroup.com\/en-hk\/wp-json\/wp\/v2\/media?parent=6093100"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-hk\/wp-json\/wp\/v2\/categories?post=6093100"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-hk\/wp-json\/wp\/v2\/tags?post=6093100"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}