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Industry reaction to The Budget

The chancellor Jeremy Hunt delivered his 2024 Budget Statement on 6 March.

The main announcements included the abolition of stamp duty relief. Multiple Dwellings Relief, which was introduced to those buying more than one house in a single transaction, has now been taken away. Intended to support investment in the private rented sector, Hunt said an external evaluation found “it was being regularly abused”.

Hunt also promised to replace the current tax regime for non-domiciled people who live in the UK and pay tax on UK earnings, while maintaining a main home overseas. As of April 2025, new arrivals won’t be asked to pay tax on foreign income for four years. If they continue to reside here, they will pay the same tax as other UK residents. Hunt called it “a more generous regime than at present and one of the most attractive offers in Europe,” and estimated it would raise £2.7bn for the UK economy. 

Hunt announced that the higher rate of property Capital Gains Tax will be reduced from 28% to 24%. He said the Treasury and the Office for Budget Responsibility “have concluded that if we reduced the higher 28% rate that exists for residential property, we would in fact increase revenues because there would be more transactions” and so would go ahead with the 4% tax cut. 

The other big announcement was that Hunt used the budget to address concerns that there are not enough properties available for long-term rentals because homes are being let out to tourists a night or two at a time.

The Furnished Holiday Lettings tax regime “is creating a distortion meaning that there are not enough properties available for long term rental by local people” he said in the budget. These laws allowed landlords to deduct the full cost of mortgage interest payments from their rental income and pay lower capital gains tax if they sold up, said Hunt, adding: “To make the tax system work better for local communities, I am going to abolish the Furnished Holiday Lettings regime.” 

Industry reaction
Marc Vlessing, founder and chief executive at Pocket Living, was less than impressed with the announcements, saying: “The rapidly emerging consensus is that we need to deliver 500,000 new homes per year, yet we can barely manage 200,000 at present. We need action to save an SME house building sector in crisis, yet despite intense campaigning by the sector we haven’t received a penny of support in this budget.

“This was a real chance, perhaps the Chancellor’s last, to unlock 1.6m homes on brownfield sites through a fairer and faster planning system, support SMEs to rapidly increase housing delivery, introduce real measures to get those hundreds of thousands of people waiting to get onto the housing ladder. The other major question is what has happened to Michael Gove’s big housing moment? Did it get stuck in planning or was it simply unviable to deliver?”

Timothy Douglas, head of policy and campaigns at Propertymark, comments: “Overall, the Spring Budget stops short in addressing the key issue of lack of supply in the private rented sector, which is higher rates of Stamp Duty when purchasing a buy to let property. Furthermore, whilst additional funding is welcome for housebuilding, the Chancellor has missed the opportunity to bring in Stamp Duty reliefs and wider reforms to support more people to buy and sell their dream home, which comes with a guaranteed boost to the economy.”

Olivia Harris at Dolphin Living says: “We feel that a huge opportunity was missed to tackle one of the key productivity challenges the country faces. That challenge, the need for affordable, stable housing, also links strongly with a second crisis – the cost of living crisis. Addressing the lack of affordable housing, particularly for workers on median incomes would also alleviate the impact of the cost of living crisis.

“Lack of affordable housing is massively undermining business through the loss of talent due to high housing costs. Any measures to boost our key industrial sectors, such as life sciences and the creative industries, needs to be matched by a supply of new, affordable to rent, housing to aid recruitment and retention of the supporting workforce. We are therefore disappointed that the Chancellor didn’t take the opportunity to shift the dial on housing delivery to meet this challenge head on.” 

Paresh Raja, CEO at Market Financial Solutions, also called the Budget a missed opportunity, adding: “In his attempts to woo voters before the upcoming election, the Chancellor missed a trick by not bringing forward more meaningful, positive policies for the property market. But we knew that was likely to be the case. 

“Cutting property CGT rates will be welcomed in some quarters. But elsewhere, after years of tightening regulation in the buy-to-let market, the Government has indeed now moved to put the squeeze on holiday lets. Ensuring there are ample properties available for local homebuyers in tourist hotspots makes sense, but it is regrettable that the solution is always to target investors and penalise landlords rather than boosting supply through greater investment into housebuilding.

“We also have to be alert to the fact that scrapping non-dom tax rules risks damaging the appeal of the prime London property market among international investors. Time will tell how plans for a shorter-term non-dom-style tax status might take shape, but given Labour was already pushing to scap non-dom status, we should not expect much relaxation in this reform. 

“That there was so little by way of stamp duty reforms, housebuilding commitments or ways of incentivising landlords to invest in their properties - particularly for energy efficiency purposes - was disappointing. It was telling that Hunt praised the Government for having overseen the building of 1m new homes in this parliament, even though this figure falls well short of what is needed in a five-year period. Meanwhile, suggestions of new 99% mortgages did not come to fruition. 

“Ultimately, after two years of rising interest rates, (this) Budget would have been an opportune moment to bring about a string of policies and reforms to boost the property market. It feels like a missed opportunity.”

This sentiment was echoed by the CEO of Finance.co.uk, Edward Newman, who said: “The headline from (the) budget will be the two-percentage-point cut to National Insurance, saving the average person £450 a year. However, by keeping the freeze on income tax thresholds, many will be paying more tax. Without the freeze set in 2021, workers could be earning an extra £2,400 tax-free each year, so this 2p cut in NI does little to make up the difference.

“It’s also disappointing that almost no action has been taken to help the thousands struggling to get on the property ladder, with no changes to stamp duty or the introduction of 99% mortgages. This budget represented potentially the last opportunity for this government to make real change for people struggling with rising costs in the UK.  Unfortunately, once you look past the headlines, it feels like it was an opportunity missed.”

Tom Bill, head of UK residential research at Knight Frank, said: “Anyone planning to get on the property ladder would have shrugged their shoulders following this Budget. Demand-side incentives for first-time buyers such as stamp duty breaks or help for those with smaller deposits would have been welcome, particularly as mortgage rates and house prices are creeping back up.”

Richard Donnell, executive director at Zoopla, commented: “The budget marks another missed opportunity to take action on boosting supply and mortgage availability in the housing market.

“The consensus is that the country needs more new homes. Supply has increased but this has stalled. There is a need for widespread reform of the planning system to encourage supply. More funding is needed for social and affordable homes, and housing infrastructure investment to unlock supply.

“The Government should also look to support the emergence of a long-term fixed rate mortgage market as a matter of urgency. This will help more young people with smaller deposits access home ownership – particularly in southern England where deposit size is the biggest barrier to getting on the housing ladder.”

Nicky Stevenson, managing director at Fine & Country, remarked: “Reducing the higher rate of Capital Gains Tax should inject some extra energy into the housing market by increasing the number of properties for sale.

“Teetering landlords unsure about whether to take the plunge and sell their property will be encouraged by this announcement. This should offer hope for first-time buyers who are the foundation of the property market but have been hit particularly hard by high interest rates.”

Paula Higgins, CEO at HomeOwners Alliance, says the announced support for new homes “doesn’t scratch the surface”. Higgins adds: “We need to get Britain building to solve the acute lack of housing and grow the economy. We need bold policies to fix the housing crisis especially in an election year, but the government seems happy to tinker with tax incentives. The Chancellor’s intention to abolish the tax benefit for furnished holiday lets will not make a huge difference to the supply of affordable housing in these hot spots. 

“The government’s tax tweak to reduce the higher rate of CGT on property from 28% to 24% may encourage some sales but it isn’t a game changer. Likewise cancelling stamp duty relief for people who purchase more than one dwelling is a sensible correction. But if the government really wanted to get people rightsizing, then they should scrap stamp duty completely. The financial penalty of stamp duty is currently so great, it stops people moving home. It stops elderly people from downsizing, it stops families stepping up the ladder and stops homeowners making a sideways move perhaps for work or family reasons.”

Lastly, regarding the short-term lettings change, Ben Beadle, chief executive at the National Residential Landlords Association, said: “The Chancellor needs to address the chronic shortage of long-term rentals by attracting new landlords to the market. Squeezing holiday lets is not the answer. He should follow the advice of the Institute for Fiscal Studies and reverse punitive tax hikes which have stifled the supply of the homes renters desperately need.” 

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