Today’s Budget is the most eagerly-anticipated for many years, as it juggles to shore up the economy with the longer-term issue of filling a fiscal black hole created by public spending because of Coronavirus.
For agents the event has taken on particular significance following the success of the stamp duty holiday and long-running speculation over that measure and others likely to directly impact the housing market.
We believe there are at least four key announcements to watch for this afternoon:
- Future of the Stamp Duty Holiday: The Times is convinced it will be extended from the current scheduled end date of March 31 to late June, but does not know if it will end in the hated ‘cliff edge’ or whether it will be tapered, allowing only those currently involved in a purchase to benefit from the tax exemption. More recent speculation has put the duration of a possible extension at six weeks to three months.
- Mortgage Guarantee Scheme: Due to start next month, the scheme will require buyers - not just first timers - to save for a five per cent deposit. To offset wariness by lenders uncertain of future market movements, the government is to become guarantor for part of the loans which will be for properties up to £600,000. This scheme will not apply solely to new-builds. Rightmove has calculated that the loans will cover 86% of properties for sale in the UK, so this is going to have a very significant impact on the market.
- Property Tax Reform: This is likely to include Council Tax and Capital Gains Tax. The issues are separate and are likely to form the basis of individual consultation documents expected to be released on March 23, heralding the start of some months of debate on their future. Cynically, some have suggested that these documents will contain radical proposals likely to upset many higher rate taxpayers today, and are being shunted to a quieter period in three weeks time because of Chancellor Rishi Sunak’s desire to avoid being closely associated with unpopular policies.
- Possible Rental Sector Measures: In the past there have also been Wild Card announcements, ranging from changes to rental legislation to specific tax exemptions for first time buyers and others. So far there have been no measures previewed or hinted at to offer any support to the private rental sector. Will something be said today?
Full coverage of the Budget proposals will be here on Estate Agent Today.