The 2021 budget and what it means for the property UK market

5th March 2021

By Anna Bibby

After a turbulent year where the UK’s economy has faced its biggest challenge since the financial crash in 2008, this year’s budget has been even more highly anticipated than ever. The treasury has been given the unenviable task of not only boosting the economy in the wake of a huge global crisis but also pay for the fallout of said global crisis.

One of the most highly anticipated announcements of the budget was the extension of the stamp duty holiday. Since its introduction back in July last year, the stamp duty relief has stimulated a huge amount of activity in the property market and accelerated an impressive increase in house prices in the following months. It was initially due to come to an end this month but after mounted pressure from industry insiders and countless rumours throughout the press, the chancellor finally announced that the stamp duty holiday will be extended to the 30th of September.

In a bid to ease the pressure off frantic homebuyers and their conveyancers trying complete before the deadline, the stamp duty will be tapered off as opposed to ending the scheme on a cliff edge. The measures as they stand now will come to an end on the 30th of June and then after that, the band where buyers pay zero stamp duty will be dropped from £500,000 to £250,000.

The chancellor has also put a huge emphasis on stimulating the wider economy and helping businesses find their feet as the country starts to open up again. Some of these announcements include a UK-wide Recovery Loan Scheme to aid businesses through the economic recovery process; VAT cut to 5% and business rates relief for businesses in the hospitality and tourism sector until September 2021; business rates relief from 750,000 eligible businesses in the retail, hospitality and leisure sectors; a £300 million Culture Recovery Fund to support cultural organisations such as theatres and museums and fuel and a maintenance of the income tax Personal Allowance and higher rate threshold from April 2022 until April 2026. There will also be an extension to the Furlough Scheme and an extension for the £20 uplift in Universal Credit - as well as another grant for self-employed individuals affected by the pandemic. Despite rumours that there could be a 40% hike in Capital Gains Tax, this was left unaffected in the budget which will be a huge relief for a number of landlords across the country.

Sunak also took the opportunity to aid the levelling-up of various parts of the country. The biggest announcement of which was that there will be new economic hubs in the North of England - a brand-new Treasury Campus in the North East town of Darlington and a new national infrastructure bank in Leeds. There will also be a Levelling Up Fund worth £4bn for towns across the country, the bulk of which will be given to towns in the North West of England.

The positive influence of the Stamp Duty Holiday on the UK’s housing market has been no secret - according to the Nationwide, UK house prices have seen a year-on-year increase of 6.9% in February. Although this has slowed down slightly in recent months, the extension on the stamp duty relief is expected to boost buyer activity even further and the UK property market will continue to weather the storm as the country continues to recover from the pandemic.

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The 2021 budget and what it means for the property UK market

05 March 2021

After a turbulent year where the UK’s economy has faced its biggest challenge since the financial crash in 2008, this year’s budget has been even more highly anticipated than ever. The treasury has been given the unenviable task of not only boosting the economy in the wake of a huge global crisis but also pay for the fallout of said global crisis.

One of the most highly anticipated announcements of the budget was the extension of the stamp duty holiday. Since its introduction back in July last year, the stamp duty relief has stimulated a huge amount of activity in the property market and accelerated an impressive increase in house prices in the following months. It was initially due to come to an end this month but after mounted pressure from industry insiders and countless rumours throughout the press, the chancellor finally announced that the stamp duty holiday will be extended to the 30th of September.

In a bid to ease the pressure off frantic homebuyers and their conveyancers trying complete before the deadline, the stamp duty will be tapered off as opposed to ending the scheme on a cliff edge. The measures as they stand now will come to an end on the 30th of June and then after that, the band where buyers pay zero stamp duty will be dropped from £500,000 to £250,000.

The chancellor has also put a huge emphasis on stimulating the wider economy and helping businesses find their feet as the country starts to open up again. Some of these announcements include a UK-wide Recovery Loan Scheme to aid businesses through the economic recovery process; VAT cut to 5% and business rates relief for businesses in the hospitality and tourism sector until September 2021; business rates relief from 750,000 eligible businesses in the retail, hospitality and leisure sectors; a £300 million Culture Recovery Fund to support cultural organisations such as theatres and museums and fuel and a maintenance of the income tax Personal Allowance and higher rate threshold from April 2022 until April 2026. There will also be an extension to the Furlough Scheme and an extension for the £20 uplift in Universal Credit - as well as another grant for self-employed individuals affected by the pandemic. Despite rumours that there could be a 40% hike in Capital Gains Tax, this was left unaffected in the budget which will be a huge relief for a number of landlords across the country.

Sunak also took the opportunity to aid the levelling-up of various parts of the country. The biggest announcement of which was that there will be new economic hubs in the North of England - a brand-new Treasury Campus in the North East town of Darlington and a new national infrastructure bank in Leeds. There will also be a Levelling Up Fund worth £4bn for towns across the country, the bulk of which will be given to towns in the North West of England.

The positive influence of the Stamp Duty Holiday on the UK’s housing market has been no secret - according to the Nationwide, UK house prices have seen a year-on-year increase of 6.9% in February. Although this has slowed down slightly in recent months, the extension on the stamp duty relief is expected to boost buyer activity even further and the UK property market will continue to weather the storm as the country continues to recover from the pandemic.

Looking to invest in buy-to-let? Click here to see what we have available!

Anna Bibby

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