See our Property & Construction Team’s predictions and wish list for the Chancellor’s Spring Budget 2024 below.
Help to buy scheme extended or re-imagined
As we have seen in the news recently, the number of insolvencies in the construction sector is increasing significantly and the housebuilding sub-sector is the worst hit. This is due to weak demand for new homes, which is caused by higher interest rates and the general cost of living crisis. The Help to Buy scheme ended in 2023, so to see the scheme either extended or re-imagined with a view to providing stimulus in the housing market would be ideal.
Home-owner incentives
Home improvement projects are also stalling. A possible way of increasing demand could be to offer incentives to home-owners and landlords who spend money on improving the energy efficiency of residential properties, or offering enhanced capital allowances to businesses that spend money on green technologies.
Reconsidering tax relief
In the residential rental sector, there is an increase in the number of private landlords suffering rent arrears as lower income tenants struggle to pay rents. Many landlords are also paying higher interest charges and the combined result is an increasing number of landlords in arrears on their mortgages, forcing many to sell up. A decreasing stock of private rental housing could be disastrous for low-income families as there is also a lack of available social housing. We would like to see the Government reconsider the punitive tax rules which restrict the amount of tax relief that individual landlords can claim on their interest costs.
It will be interesting to see if there is a strategy to stimulate the property market. Many would like to see another Stamp Duty holiday, or the stamp duty surcharge scrapped. We know the CGT allowance is due to be reduced from £6,000 to £3,000 in April 2024 so this could be delayed or scrapped.