Chancellor Jeremy Hunt has unveiled his highly anticipated Spring Budget, featuring a range of policies set to impact homeowners and aspiring homebuyers alike.
Against a backdrop of energy price rises, sluggish homebuilding rates, and a persistent struggle for many to enter the property market, Hunt introduced a series of measures aimed at addressing these concerns.
Let’s delve into the key highlights of the Spring Budget and examine how they will impact both current homeowners and those aspiring to own a home in the future.
Nuclear and decarbonisation products funded
The government announced new investments in nuclear energy and renewable energy industries.
A deal worth £160 million was announced with Hitachi to acquire two nuclear sites, one in north Wales and another in south Gloucestershire, to enhance the country’s energy security. It was also announced the chancellor hoped to have nuclear energy provide a quarter of UK energy needs by 2050.
Nuclear Industry Association chief executive Tom Greatrex said: “This is a pivotal moment for the future of nuclear in the UK and should mark the beginning of new projects at these sites.”
Additionally, the chancellor confirmed the government’s commitment to developing small modular reactor (SMR) technology.
An extra £120 million has been allocated to the Green Industries Growth Accelerator (Giga) program, aimed at expanding low carbon manufacturing supply chains in the UK.
This funding boost brings the total investment in Giga to nearly £1.1 billion, with a portion earmarked for expanding UK-based supply chains in electricity networks, offshore wind, carbon capture, utilisation, and storage (CCUS), and hydrogen sectors in order to help meet the government’s goal to reach net zero by 2050.
Homebuilding and help for first-time buyers announced
The government stated their intention to increase homebuilding and help first-time buyers get onto the housing market more easily in the Spring Budget.
The government announced plans to implement the Long-Term Plan for Housing, which includes targeted support for Cambridge, London, and Leeds.
In Leeds, plans are underway to build 20,000 homes, while London is establishing the Euston Housing Delivery Group with £4 million to aid in the creation of up to 10,000 new homes.
A modification to Capital Gains Tax (CGT) also announced, which aims to invigorate the housing market. The higher rate of CGT for residential property disposals will be cut from 28% to 24% while the lower rate will remain at 18% for gains within an individual’s basic rate band. It is hoped this will encourage second homeowners to sell their homes.
The second phase of the Local Nutrient Mitigation Fund was also announced, aimed at unlocking 30,000 homes by 2030 by removing nutrient neutrality laws that are delaying or blocking planning permission being granted for thousands of new homes.
Multiple Dwellings Relief scrapped
The government is implementing changes in the property tax system in order to promote “fairness and efficiency”.
The government announced the abolition of Multiple Dwellings Relief, a stamp duty tax relief for homeowners who are buying more than one property.
However, transactions with contracts exchanged before March 6, 2024, will still benefit from the relief, as will purchases completed before June 1, 2024.
The Furnished Holiday Lettings tax regime was also removed to create parity between short-term and long-term rentals, which was aimed at supporting local residents buy houses in areas where homeowners struggle to compete with non-locals buying holiday homes.
Energy Profits Levy extended
An extension to the Energy Profits Levy was announced to ensure oil and gas producers pay their fair share of taxes on the profits they make.
The Energy Profits Levy was introduced in 2022 amid rising profits from fossil fuel and gas providers in the UK, such as British Gas who announced £969 million in profits last year.
As gas prices are forecast to remain abnormally high until at least 2028-29 the government extended the Energy Profits Levy by an additional year to 2028-29.
The government is also bringing forward legislation to put beyond doubt that the Energy Profits Levy will end if oil and gas prices drop below the levels set by the Energy Security Investment Mechanism before 2029.