The March 2024 Budget
It’s that time of year again – the Budget! So, what’s in it for landlords, tenants and homeowners?
It’s a very special Budget this time around as it’s the last one scheduled before the next general election, which is expected to take place later this year. Which means it’s designed to give the Tories a boost going into the election.
General points to be aware of?
So there’s not a lot in the Budget that is due to directly affect the property industry. However, property is a big investment – whether you rent or own, a large portion of your monthly income likely goes into keeping a roof over your head.
Stay tuned because we’ll dig into what will directly impact landlords and tenants later in the video. But now let’s take a look at the wider Budget and the key points that we think will impact your rent or mortgage budget:
- National Insurance, a payroll tax, cut by 2p in the pound for employees and the self-employed. While that doesn’t sound like much, that does mean a little more in your pocket, so if your rent or mortgage has gone up recently, this will ease things, just a little
- The child benefit limit for the highest-earning parent has been moved up, from £50,000 to £60,000 and partial child benefit will be paid where highest earner earns up to £80,000. Again, that should loosen up your personal budget a little if you have children.
- The government fund for people struggling with the pressure of the cost of living crisis will continue for another six months, so if you are struggling, now is the time to get in touch
- There will be a new British ISA, allowing additional £5,000 investments in UK equity to be made each year. Whether you’re saving for your first home or just building your savings – this is good news for you!
What’s in it for landlords?
If you’re a holiday let landlord, I’ve got some bad news for you. Those planned tax breaks for owners of holiday let properties? They’ve been scrapped.
Chancellor Jeremy Hunt said this is to avoid the ‘distortion of not enough properties to rent for local people.’
Many communities which see a large number of holiday lets have complained that they drive up prices so that younger people struggle to rent or buy in their hometowns and villages. It also creates a more transient population that impacts local businesses who struggle through the off peak season due to a lack of local population, who have been priced out.
On average, this will cost holiday let landlords £2,835.
However, there will be a cut in the Capital Gains Tax paid on profits from selling property – from 28% to 24%. CGT applies if you’re making a profit on selling a property that isn’t your main home (so a buy-to-let is a good example, or even an inherited property).
So if you are planning to sell up in order to up or downsize, this is a cut that will be good news for you!
There’s no update about easing the increasing rates on mortgages, so you are still going to feel the sting if you are remortgaging in the next few months.
Don’t forget, you can get in touch with us if you need any support with an upcoming mortgage or remortgage – just book a call today.
What’s in it for tenants?
We’ve talked before about the fact that the government has missed its annual building targets, but they are not to be deterred!
Back in 2021, the Conservatives set the target to build 300,000 a year by the mid 2020s – perhaps a tad ambitious given the impact of the pandemic. Something Housing Secretary Michael Gove seemed to agree with, as he said in December 2022 that these figures were only ‘advisory’.
But Mr Hunt has once again committed to building one million homes by the end of the Parliament – allocating a whopping £242 million to new house building. Not only that, there are going to be specific projects in Canary Wharf, Blackpool, Sheffield and Cambridge.
Why is this good news for tenants? Well, demand has been outstripping supply for a while now, which is driving up rents. As more homes become available, there is the hope that they will be cheaper to rent and buy.
Whilst there is nothing in the Budget that will have a huge financial impact on your monthly finances, but there are definitely plans that should ease things for you, just a little bit and every little helps in the current economic climate.
