Despite the advice not to gather together or of a health minister testing positive for Coronavirus this morning 600+ MP’s met to listen to the new Chancellor deliver his first Budget following the Conservatives Election victory last December. The headline will be “They’ve found the Magic Money Tree!”.
How they will keep to their spending pledges is anyones guess. Borrowing will rocket from £47bn to £67bn according to The Red Book so we seem to have ripped up the fiscal rules and found a pot of money – and lots of it!
I don’t imagine that you will be interested in my take on the whole Budget so my comment on the property element is as follows;
Non-resident buyers will face a 2% Stamp Duty surcharge from April 2021.
And that’s pretty much it!
No sign of a broader review of Stamp Duty as many had hoped, of moving the burden from the buyer to the seller or of the possibility of a Mansion Tax.
The Bank of England reduced Base Rates by half of one percent this morning so that ought to make mortgages cheaper if the cut is passed on.
And that’s really about it. Tomorrow (Thursday) the Housing Secretary will outline the Governments plans for new homes (lots more ‘affordable’ homes however that is to be defined), for changes to planning, for some money for leaseholders stuck in 18m plus high buildings because their building is clad in something that may be combustable and he will no doubt bring forward other ideas, some original, some borrowed from previous Governments to try to increase the number of homes being built.
Houses are unlikely to be cheaper, more affordable or plentiful but he will at least look busy.
What will the change in Stamp Duty mean? Well taken as a whole the Budget has probably given house prices a 1% lift but the Virus and our actual exit from the EU may well knock all that and more off prices by Christmas. Estate agents will tell the papers that there will be a rush of foreign buyers who will try to beat the deadline in a years time but I doubt that most will. I expect that most will be concerned about whether they will be able to fly to the UK to visit their house rather than if it will cost them more or less to buy. In reality I expect that most will just offer 2% less or take the cost on the chin and regard it as part of the cost of doing business. Buying a home in England and Northern Ireland won’t be more expensive than buying a home almost anywhere else in the world.
In summary, not much to distract us from the global pandemic we face today or the economic fall out we face in nine months when we will actually leave Europe.
A quiet day for me, all-in-all.