What did the Spring Budget do for the housing market?

March 20, 2023

Chancellor Jeremy Hunt's budget plans contain very little aimed directly at the UK housing market.

But while there was little gain, there was no pain either.

The Private Rented Sector was hoping for specific help to reduce the number of landlords leaving the industry and to increase the supply of homes.

And many commentators had called for cuts in Stamp Duty to boost future house sales.

But Mr Hunt chose not to step in and instead concentrated on measures to grow the economy by creating incentives to get more people back to work.

However, there were policies which may boost the demand for buying and renting in the North West, with the creation of new Enterprise Zones, which will create more jobs - and bring buyers and renters in their wake.

And some of the other announcements will indirectly help homeowners, landlords and tenants.

Enterprise Zones to create "goldmine" areas.

Among the almost £1bn being poured into areas around the country, all run by Combined Mayoral Authorities, the list includes Greater Manchester, Liverpool City Region, and West Yorkshire.

Each will get £16m per year spread over five years to support businesses, train, and create infrastructure.

There's also around £35 million to fund research and development projects in Manchester, to create high-quality, well-paid jobs. This may also send up house and rental prices, attracting investors, not just to cities but to surrounding areas.

Developers will follow, building more new-build houses and flats to rent and buy.

Inflation is going down, and energy prices protected.

In news which will boost confidence in the housing market, the forecast from the Office of Budget Responsibility, made after the Budget, predicts inflation will fall from 10.1% in January 2023 to just 2.9% by the end of the year. This is close to the Bank of England’s desired base rate of 2%.

In a widely-expected policy reversal, the Energy Price Guarantee has been extended until July. It was due to end in April and keeps energy bills at a yearly average of £2,500. By then, falling energy prices will be helping householders. And homes with pre-payment meters will pay the same price as direct-debit customers from July.

All of this should leave more money in the pockets of homeowners, renters and investors, who will also benefit from the measures below.

For the young and the not so young.

The rising cost of childcare has long been considered a barrier to parents returning to work. Working parents are entitled to 30 hours a week of free childcare for three-to-four-year-olds in England. This will now be extended in a £5bn package, with 15 free hours a week for two-year-olds in April 2024, for those over nine months in September 2024, then 30 hours for all from September 2025.

The Chancellor also announced a £63m "Returnership" programme for those over-50s who might want to return to employment in a different sector.

In an effort to retain more highly-paid people in the NHS and elsewhere, the tax-free limit on pension savings has been abolished, and the annual allowance - how much you can save tax-free - has been raised from £40,000 to £60,000.

Easier to find tradespeople?

The government is adding more trades to the list of skilled foreign workers allowed into the UK. This includes bricklayers, roofers, carpenters and plasterers.

This is welcome news as there is a chronic shortage of tradespeople.

Other measures:

  • £200m for councils for potholes
  • A 12-month extension to the freeze on fuel duty
  • £900m investment for the artificial intelligence sector
  • Tax breaks for the entertainment industry
  • A rise in Corporation Tax from 19% to 25% but more tax-deductible benefits
  • Measures to allow disabled people to take a job without fear of losing their benefits

Here at Farrell Heyworth, we can help property buyers, sellers and landlords to get the most, whatever their budget.

We cover most of the North West area, including Lancaster, Preston, and Blackpool, and have years of experience and knowledge behind us. We'd be delighted to help you with any of your property needs.

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