Posted on 5th March 2021 at 14:11
The Spring Budget sets out the Government’s plan for the financial year ahead, while outlining the country’s current financial circumstances. This year the Budget was expected to continue current, and introduce new, measures in reaction to the global COVID-19 pandemic.
Investors in the UK property market were waiting with bated breath before the Spring Budget announcement, amidst expectations of increased tax rates, among other potential measures, to combat the cost of supporting the country through the pandemic.
But the Budget, released Wednesday 3rd March, contained some pleasant surprises for those wishing to make, or with currently active, investments in UK property; with direct support for the property industry amongst the many announcements from the Government, intended to help improve the struggling UK economy.
The stamp duty holiday, an exemption from stamp duty for properties valued up to £500,000 that was previously introduced, will be extended until 30th June - this was due to end on 31st March.
The extension will come as a relief for many people who have suffered from delays; worried their property sale may not complete before the end of March. The extension also comes with further relief – a tapering period of three months to provide a smooth transition back to normal stamp duty on property in October. Until the end of September, all properties valued up to £250,000 will be exempt from stamp duty. This will then drop back down to £125,000 from 1st October.
This will be of particular interest to property investors as it will mean they could make substantial tax savings right up until October, increasing their potential ROI greatly.
While the mortgage guarantee scheme is a welcome helping hand after the effects the pandemic has had on the economy, banks are still very cautious when it comes to lending and valuers are still undervaluing properties against what buyers are willing to pay, which causes issues with the buyer getting the required finance and causes blockages within property transactions, especially where chains are concerned. So, it is worth bearing this in mind when trying to take advantage of any assistance provided or when factoring these into your property investment decisions.
But these two major property announcements should go at least some way to help improve house prices within the UK, potentially driving prices back up after a dip during the pandemic, which should improve return on investments for those with current investment projects in the UK property market.
For UK property investors, overall, this Budget should provide a sense of relief and positivity towards the future of property investment in the UK. As with many Budget’s announced by the Government it is worth moving forward with a sense of caution, but at least things should start to move forward with a little more certainty now.
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