The new Chancellor of the Exchequer, Kwasi Kwarteng, revealed a ‘new era of growth’ after unveiling the contents of the mini-budget. But has the move failed to acknowledge that the UK property market extends far beyond stamp duty, given the range of stakeholders it impacts, including developers, investors, and agents?
With over 200,000 people lifted out of paying stamp duty after the raised threshold – accompanied by several tax cuts – a mixed reaction has been seen throughout the property industry.
Simon Davis, Co-Founder of Nimbus, reflects on the mini-budget 🤔🔎:
"The ‘mini-budget’, as it is aptly named, indicates one crucial thing for the property industry as a whole, and that is this government, much like the previous one, sees both commercial and residential sectors as a significant driver of future growth.
Last year we all recall Boris Johnson’s podium mantra of “Build. Build. Build”, where he introduced a raft of relaxations to the planning system – class E and class MA - to encourage new developments, and to take control away from local planning authorities. This time, however, the Truss and Kwarteng partnership is all about tax cuts to stimulate new, and continued investment - much of it aimed directly or indirectly at property.
The government cannot afford a significant fall in house prices, so much of the economy is propped up by it, so they have introduced stamp duty savings to at least maintain a status quo. This action should give much confidence to any investor or developer looking to build, convert or acquire residential-led property schemes because it means that the government will do as much as possible to keep values stable.
Data shows that half of UK property is without a mortgage, and 90% of those with mortgages are fixed for up to 5 years, so the impact of the recent interest rate rises is unlikely to impact the property market in the short term.
How will the mini-budget announcement impact business sentiment? Will it stimulate growth in the commercial property sector?
“The introduction of investment zones seeks to create micro-environments that are highly conducive to business investment - with significant tax incentives. Full Stamp Duty Land Tax (SDLT) reliefs, enhanced structural and buildings allowances, and 100% business rates relief to develop and invest in these locations is a massive boost for the commercial property sector, and again should give great confidence to the market that the government is backing them.
This first showing of what this government believes in is very encouraging to the property sector, both residential and commercial, and should give much confidence to it as a sector for continued investment”.
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