Following the Spring budget Announcement this week, the property market has responded to the changes it has imposed:
Drop in Inflation and Mortgage Rates:
The anticipated drop in inflation to around 2% is expected to reduce mortgage rates, potentially alleviating the burden on borrowers. This is seen as a positive development for the property market, as lower interest rates could stimulate housing activity.
Supply of New Homes:
While the budget didn't focus extensively on increasing the supply of new homes, investments in various regions such as Sheffield, Blackpool, Liverpool, and tech hubs like Canary Wharf aim to create more housing and infrastructure. However, some voices within the industry express a desire for more direct attention to supporting first-time buyers and increasing overall housing supply.
Property Tax Changes:
Several property tax changes were announced, including the scrapping of multiple dwellings relief and furnished holiday lets tax relief, as well as a reduction in higher-rate Capital Gains Tax (CGT). These changes could impact landlords and property investors, potentially reshaping their investment strategies.
General Economic Measures:
The budget also introduced general economic measures such as adjustments to VAT thresholds, National Insurance rates, and child benefit thresholds. These changes could have broader implications for both individuals and businesses, indirectly affecting the property market.
Opportunities for Investors:
Job creation and local investments present opportunities for property investors, particularly in sectors such as nuclear energy, healthcare, and clean energy. Understanding where government investments are being made can guide investment decisions and potentially drive growth in property prices and rental demand.
Overall, while there are positive aspects such as anticipated reductions in mortgage rates and investments in key sectors, there are also concerns regarding the need for more support to increase housing supply and address issues in the property industry. As the market evolves, it remains to be seen how these trends and reflections will shape the future landscape of the property market.
