Despite some speculation, the Spring Budget was a muted affair for property in the end. Of course, the housing market is affected by the wider economic outlook and both home-owners and investors will be interested in the Chancellor’s plans to promote economic growth (such as the childcare measures, changes to pension rules and the extension of the Energy Price Guarantee).
There had been some rumours that the higher rates of Stamp Duty Land Tax (SDLT), which usually apply to those who own more than one dwelling, might be increased following Scotland’s example at the end of last year. The relevant tax there is called Land & Buildings Tax and the additional supplement was increased to 6% in December 2022. The Chancellor made no announcements relating to SDLT payable in England today, save for limited reliefs applicable only to Investment Zones and dwellings made available to Ukrainian refugees under the Homes for Ukraine Sponsorship Scheme. The reductions previously confirmed in the Autumn statement (which I covered here) remain in place and will apply until 31 March 2025, as now set out in the Stamp Duty Land Tax (Temporary Relief) Act 2023.
However, we anticipate further changes in the future as we still await the government’s response to its 2021 consultation on mixed-use property and multiple dwellings relief. If you are interested in developments in this area, you can read our update on the latest tribunal decision latest tribunal decision here, which involved a rare win for the taxpayer.
The House of Commons Library published a research briefing, Background to Spring Budget, on 9 March 2023 which notes that the economy is expected to remain weak in 2023, with household incomes under pressure leading to lower consumer spending. However, the latest UK Residential Market Survey published by RICS in February 2023 suggests that are signs of a more stable picture emerging through the course of 2023. The impact of the measures announced in today’s Budget on house prices remains to be seen but we will be tracking developments in this area.
"Since mid-October, 10-year gilt rates have fallen, debt servicing costs are down, mortgage rates are lower and inflation has peaked. The International Monetary Fund says our approach means the UK economy is on the right track."