Budget 2020 and housing

Budget 2020 set out the government’s plan aiming to minimise the impact of COVID-19 as well as new polices relating to the UK tax, environment, infrastructure and public services.

For the property industry the most relevant is the introduction of 2% stamp duty surcharge for non-UK buyers, which will apply from April 2021. To some property professionals expecting stamp duty cuts or the complete overhaul of it, this came as a surprise. But almost all who were hoping for a long-term increased sales activity with more transactions, this policy is a very disappointing move. The surcharge is branded as ‘detrimental’ and ‘disincentive’ and will have a negative effect on the London new homes and Prime Central London property markets.

Many non-UK byers investing in second homes are already paying 3% SDLT, and the additional 2% will be another reason to purchase elsewhere. To avoid the additional tax, overseas property buyers will most certainly be rushed to invest or finalize purchases in the next 12 months.

Looking long term, the surcharge could cause falling overseas investments, and the supply of new built homes may slow down. Even so, according to the more optimistic property analysts, transactions will not halt if the Capital remains one of the most attractive global cities to invest.

On the other hand, the government has just committed to a considerable infrastructure and public services spending outside London and the South East. Investments in rail, brownfield land and research and development will most certainly increase interest in the housing and property sales in regional cities in the Midlands and the North of England. Nine areas including Manchester will receive £1.1 billion of allocation from the Housing Infrastructure Fund to invest in infrastructure to help unlock new housing.

Budget 2020 and a few more housing and property related aspects

• A £10.9 billion increase in housing investment to support the commitment to build at least 1 million new homes by the end of the Parliament, and an average of 300,000 homes a year by the mid-2020The government is investing a further £9.5 billion in the Affordable Homes.

• Programme which in total will allocate £12.2 billion of grant funding from 2021-22 to support the creation of affordable homes.£400 million for a a new Brownfield Housing Fund aiming to increase land supply by making more brownfield land available for development.

• £400 million for a a new Brownfield Housing Fund aiming to increase land supply by making more brownfield land available for developments.

For the full Budget 2020 CLICK HERE

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