In the Autumn Budget on 27 September, Rishi Sunak, the Chancellor of the Exchequer announced a few measures set to impact the property market.
During the budget statement, a small change to capital gains tax filing, levy on the highest earning property developers, funding for housing on brownfield sites and investment into transport across England were all announced.
The Chancellor also revealed that the economy is performing better than expected post-COVID. At the same time, the housing market has performed stronger than was originally expected in the wake of the pandemic.
Here’s a run through of some of the key announcements from the Autumn Budget affecting the UK property market.
Property-related taxes
Despite rumours circulating prior to the Autumn Budget, stamp duty and inheritance tax have been left unchanged. There is a small change to capital gains that has taken effect.
The deadline for filing a capital gains tax return has been extended from 30 to 60 days. This will provide sellers additional time to work out what they owe and submit the return to HMRC.
However, the capital gains tax rates are staying the same for now, which is likely welcome news for landlords and investors as there has been much talk about this being raised.
Levy on property developers
Across the UK, some high-rise developments have been built with unsafe cladding. The cladding scandal was thrust into the forefront in June 2017 after the Grenfell Tragedy.
In order to remove unsafe cladding from buildings with the highest risk, £5bn worth of funding has been confirmed by the government. To help pay for this fund, a new property developer levy will come into play from next year.
Property developers earning profits exceeding £25m a year will pay a 4% tax. This will apply across a period of 10 years. This levy alone is expected to raise around £2bn for making these high-rise developments safe.
Housing on brownfield sites
Within the Budget, Rishi Sunak announced that £24m will be earmarked for a multi-year housing scheme. Of that, £1.8bn of that will go towards building 160,000 homes on brownfield sites.
This will further help the government reach its goal of investing £10bn on new housing, while unlocking over one million homes. With a continuing housing shortage, this further shows the need for more housing to be brought forward across the UK.
Transport investment
Billions of pounds have also been announced for public transport projects in a number of areas outside of London. Sunak claimed the Budget delivers “an infrastructure revolution” and includes a “levelling up” agenda to spread prosperity across England.
The growing area of Greater Manchester will be one of the areas receiving funding for public transport projects, so the city region is expected to see further transport and connectivity improvements in the years to come.
This will likely come with a number of added benefits. Transport improvements often boost the local property market and bring benefits specifically to residents and employers by increasing the area’s liveability.
Buyers and tenants alike often enjoy being located close to transport links, which could boost house prices and rental yields in the areas of Greater Manchester set to benefit the most from the infrastructure investment.
Resilient economy
In the budget statement, Rishi Sunak also talked about the current state of the economy. The UK’s independent forecaster says the economy will return to pre-COVID levels at the end of year, which is faster than expected.
This shows the resilience and strength the UK economy has shown throughout the pandemic. While there will still be challenges ahead, Sunak stated that the Budget sets out a plan in preparation for a “new economy, post-COVID”.
But it’s certainly promising to see how the UK as whole, Greater Manchester on a regional level and the property market as an industry have all recovered so far from the pandemic and successive lockdowns.
