Property Perspective managing director John Jarvis reviews yesterday’s Budget and provides his thoughts on how the housing measures that are set to be introduced may impact the property market…
“Rishi Sunak delivered his first budget in challenging times. In the short term it seems the budget was centred on helping both the economy, and the country, deal with coronavirus.
“With the news of interest rates being cut from 0.75% to 0.25% in an effort to generate economic stimulus in light of the pandemic, there is encouragement for people to spend and invest as borrowing will likely be cheaper and saving will be less attractive. This may result in a surge in buyers using this opportunity to purchase homes while mortgage rates are more affordable and put their money into property, possibly even trading up to a larger home.
“The chancellor also announced a £1.1 billion allocation from the Housing Infrastructure Fund to build nearly 70,000 new homes in high demand areas across the country. The Affordable Homes Programme will also be expanded meaning affordability across the country will improve.
“The surcharge on stamp duty (worth 2%) for non-UK residents was also confirmed and will come into play in April 2021. This will fund £650m that is to be spent on tackling rough sleeping and provide 6000 new places for rough sleepers.
“So overall is the new budget going to have an impact on the new homes industry?”
“The budget seems to be a good start, with investment in new homes and social housing, which is much-needed, and may free up other housing stock, having a possible knock on affect for the industry. It was also good news for smaller companies, with business rates being suspended and corporation tax remaining unchanged, allowing business owners to invest more in their business and improve the whole market going forward.”