BUDGET 6 March 2024 comment from Jon Hudson

 

The chancellor in his budget today confirmed that the OBR’s forecast for UK economic growth remains broadly unchanged from what it forecast at last November’s Autumn Statement.

Gross domestic product will be marginally higher this year at 0.8%. In 2027, the OBR projects that the economy will grow by 1.8% compared to November’s prediction of 2%. By 2028, it will drop to 1.7%.

Of interest for the property sector the chancellor announced that capital gains tax is to be reduced from 28% to 24%, with a view to boosting revenues and increasing property transactions. This is likely to tempt some investors and second homers to save some 4% tax on a sale however I feel it could be another ruse to get more independent landlords to sell which would free up the corporate sector to control the rental market.

So be aware of all that glitters isn’t always gold. As I have always said keep an investment longer term, if you can afford to do so, has historically always proven to be the right decision especially in London where the capital appreciation can be so high!

Additionally, the chancellor says he will scrap tax breaks which make it more profitable for second home owners to let out their properties to holiday makers rather than to long-term tenants to rent. Hunt also said he will abolish the furnished holiday lettings regime which he said discouraged longer term lets which have made rents rise.

Stamp duty remained pretty much unchanged except the relief for purchasing multiple dwellings in one transaction has been abolished.

 

So should you decide to raise a glass to this budget you can also do so safe in the knowledge that any alcohol duty increase has been frozen until February 2025. Cheers !!