In life there are always winners and losers. The spring budget, announced on Wednesday by chancellor Jeremy Hunt MP, was no exception.
Amongst the winners were those who want to see more house building. Mr Hunt pledged to build a million more of them before the end of this parliament. Music perhaps to the ears of those who want somewhere to live. However, it will be interesting to see how on earth the government manages to achieve this audacious figure given it hasn’t been able to get anywhere close to 300,000 new homes per year as promised in its 2019 manifesto.
Alongside this, Mr Hunt announced £242 million to finance the new house building. This includes specific projects in London’s Canary Wharf, as well as in Blackpool, Sheffield, Liverpool, and Cambridge.
Elsewhere there was at last some good news for landlords, with the announcement of a reduction from 28% to 24% of the higher rate of property Capital Gains Tax.
It means landlords could claim CGT relief and count profits from the rent for pension purposes and it’s hoped the move will increase property transactions.
The buy-to-let sector was given a further boost with the abolition of the furnished holiday lettings (FHL) tax regime from April 2025.
This has been designed to help unlock more full time rentals in tourist areas such The Cotswolds where those looking for long-term tenancies are struggling to find them.
However it’s a blow for those second home owners who let out their properties to holiday makers and could lose them an average of £2,835.
Other losers include those landlords who rely on Multiple Dwellings Relief (MDR) as it will be abolished from June this year. This was available for people who buy more than one residential property at a time. Justifying the announcement, the government said it had found no strong evidence the relief was meeting its original objectives of supporting investment in the private rental sector.
There was also nothing for home buyers, including a backing of a 99% mortgage scheme for first time buyers, which some in the sector had been advocating to enable them to get a foothold on the housing ladder.
